This is what Lotus has to say about Domino and Lotus Notes...
The following is taken from the Domino Learning Center which can be downloaded from Lotus Technology Learning Centers ( Look under the category "New" for Domino 5.0 )
From the Domino R5 Technology Learning Center...
What is Domino?
With Release 5.0, Domino has become an integrated messaging and Web application software platform. Domino offers three server types, (Mail, Application, Enterprise) and an application development tool, Designer. Other components such as NotesMinder, DECS, QuickPlace , and the Notes Client are included with Domino during installation. Combined, these applications provide a robust environment for creating Web applications that support workflow, RBDMS connectivity, and collaboration.
Domino and Lotus Notes
It is common for Lotus to be asked, "Now that Domino is here, what is Notes?" The answer is fairly simple. Domino is comprised of the Application, Enterprise and Mail servers, along with the Designer. Notes is a powerful client that can take advantage of Domino services that browsers cannot. In other words, the Domino servers support both Web and Notes technologies and combine them to produce an integrated environment unmatched by any other technology.
Notes supports a large number of technologies. Applications written with LotusScript, the Lotus formula language, JavaScript, HTML, etc. can all be used by the Notes Client. Therefore, applications can be developed that have two faces: a browser face for the Web, and a Notes face for complex workflow, enterprise integration, etc.
Domino Architecture
The Domino server supports two worlds -- the browser world via its HTTP task, and the Notes world via its Notes task. Each task represents a vastly different world, yet the Domino server is able to combine these worlds to support powerful applications. For browser applications Domino publishes HTML, JavaScript, Java, etc. as any other HTTP server would. In addition, Domino is able to take Notes elements, such as views, and translate them to HTML pages for browser use.
The HTTP server allows Domino to serve HTML Web pages to any Internet client.
Here is a diagram of the Domino architecture:

The Domino Web engine allows Web users to access back-end Notes databases and retrieve data. Domino will convert Notes objects into HTML on the fly and compile them into a single HTML document to be displayed to the user. Domino has dynamic publishing capabilities that make it a powerful and efficient server.
Any design changes immediately become global to all forms and views. This minimizes the maintenance required for a Domino-powered Web site. For example, when a document is added to a Domino site, views are updated automatically and are immediately available to Web clients.
The user's ACL determines which documents they can see and access.
When documents are composed, fields can be automatically computed and displayed to a browser.
If the data is not being directed to a Notes database, the Domino HTTP server will serve the appropriate HTML documents. These documents are usually stored in the server OS directory structure.
Domino also supports the URL (Universal Resource Locator) Internet protocol. For example, http://www.lotus.com is the URL that tells the browser to go to the Lotus home page. The structure of the URL indicates whether Domino will access a Notes database or not. The URL commands that come with Domino can be used to access a particular element in a Notes database. Here is an example of a URL that will access a Notes database on a Domino server:
http://domino.lotus.com/domsite/30daydominodisc.nsf/All+by+Date?OpenView&Start=1&CollapseView
This section "http://domino.lotus.com" instructs the browser to use the HTTP protocol to access the Domino Web site. The remainder of the path references a view in the Notes database. The Domino engine is invoked to retrieve elements from a Notes database. The question mark followed by the OpenView parameter signifies the command to open the All by Date view in the discussion database. Arguments are followed by ampersands to instruct the browser how the view should appear to the user. In the example above, the browser will display the first document in the view and collapse the view.
Domino will automatically translate links into URL syntax. You can link to any of the following Notes objects:
forms
views
documents
navigators
agents
When you click on links to navigate in a site, Domino generates the necessary URLs. As you develop applications with Domino, you do not have to keep track of the links. For example, if you have an action hotspot which includes a view link, Domino uses a URL that references a Notes Universal ID (UNID) to the view. In fact, this is the structure that Domino uses to maintain all Notes elements that are linked to each other. Since the UNID of the view will always remain the same, the link is more stable than a static HTML reference. The Notes UNID does not change when the database is replicated to other Domino sites, so the data is exactly the same in both places.
Here is an example of a URL that was automatically generated by Domino when a document was opened from a browser:
http://domino.lotus.com/domsite/30daydominodisc.nsf/564ec5941a21a7478525632a007bd41f/1a64683988dc59ae852563d1006623eb?OpenDocument
564ec5941a21a7478525632a007bd41f is the 32-digit hex character Universal ID for the view, and 1a64683988dc59ae852563d1006623eb is the 32-digit hex character Universal ID for the document.
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