Short answer: Application Data is now AppData
Explanation:
Many folders used by earlier versions of Windows have been moved to a new
location or given a new name in Windows Vista. However, the old folders can
still be seen if you have enabled Show Hidden Files.
Notice they are displayed with a transparent icon and a shortcut symbol.
Although these look like folders, they are actually what is known as a
junction. Junctions behave like shortcuts, but look just like regular
folders.
Their purpose is to silently redirect programs that access them to their
Windows Vista equivalent.
Since junctions aren't really folders, it is not possible to access them,
and any attempt to do so will give you an "Access Denied" error, even if you
are a "full administrator".
You can tell where junctions point to from the command prompt by issuing the
"dir /a" command. Junctions are identified and their target is shown in
brackets.
- JB
Vista Support FAQ
http://www.jimmah.com/vista/