The concept behind the application grid is to provide a virtualized in-memory data layer which can be accessed by any application. This has significant impact in improving performance and de-coupling physical data from applications.
The application grid is labeled Weblogic Application Grid and is a combination of Oracle Coherence (an in-memory data grid), Oracle JRockit (Java Virtual Machine) and Oracle Enterprise Manager.
The application grid is to the database, as AIA is to SOA. This is a space to watch out for, as the concept is still nascent, but would have huge impact on future application design.
Note: This is really an application layer product, and is different from the database grid product suite which is implicit in all Oracle databases.