The Application bar is the 72-pixel-thick strip of buttons docked on the edge of the screen adjacent to the hardware buttons.
Each button on the application bar represents a common action relevant to the current content (i.e page of the application being displayed).
An application bar should have only the the most commonly used actions – even if there are only one or two such actions. The rest of the actions should be placed in the application bar menu. We should avoid adding unnecessary clutter on the application menu. In case if there are no such commonly used actions then consider having an empty application menu and push the rest in the application menu bar. Don’t try to fit in any rarely used actions into the application menu just because it is empty, its still ok to keep them in the application menu bar.
Eg: Just because there are no commonly used actions, it doesn’t makes sense to put “about” and “settings” in the application bar, it is better to keep them in the application bar menu.
This is how a typical application bar looks :
This is how a typical application bar menu looks :
Using an application bar in your application
Any page can be given an application bar. This is done by setting its ApplicationBar property to an instance of ApplicationBar object.
It can contain upto 4 buttons (which are of type ApplicationBarIconButton) children and it also has a seperate application bar menu (which is of type Menuitems collection) that can be filled with as many application bar menu items as you want (which are of type ApplicationBarMenuItems instances) .
Reference : 101 Windows Phone 7 Apps – Vol 1 (Chapter 2)