King,
<b>System errors,</b> which are triggered by the runtime. These might be errors during transfer, due to a failed server
<b>Handling System Errors:</b>You catch errors that occur when transferring a message by using the exception class CX_AI_SYSTEM_FAULT. You distinguish system errors using error codes; these are managed and documented centrally for all systems. The application can display an error message by using the attributes CODE and ERRORTEXT of the exception class.
<b>Application Errors</b> are triggered or handled by the application alone. An example would be a request for data about a material that is unknown in the receiver system.
<b>Handling Application Errors</b> :Fault messages are provided in WSDL for handling application errors. The proxy generation functions use these to generate the exception classes (prefix CX_).
Exception classes for application errors are derived from the basis exception class CX_AI_APPLICATION_FAULT. You can use this exception class to determine an error situation, independently of the exact error, or in a CATCH branch, you can use it to catch all the errors that have not yet been handled.
For further help please go through the url http://help.sap.com/saphelp_nw2004s/helpdata/en/25/a45c3cff8ca92be10000000a114084/frameset.htm
Hope this helps....
---Satish
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