The Oracle BPEL_PM is a java application that can be deployed in any J2EE container. In the case of Oracle Application server it is deployed in Oracle's OC4J (Oracle Container for Java) container.
The OC4J container is hosted on an Application server. It is similar to an instance of a database. It should be managed and administered as a physical object. Property settings for the OC4J container affect all applications deployed within that container.
The BPEL domain is a logical partition. BPEL domains are created for logically separating different business process flows. Domains could be used to delineate dev and test environments in a stable production environment. They could also be used to delineate along functional or business areas. Domain settings affect all process flows that are deployed within that domain.
There can be multiple domains within a BPEL_PM instance running in an OC4J container.