Wikipedia describes composite application as follows:
In computing, the term composite application expresses a perspective of software engineering that defines an application built by combining multiple services. A composite application consists of functionality drawn from several different sources within service oriented architecture (SOA). The components may be individual web services, selected functions from within other applications, or entire systems whose outputs have been packaged as web services (often legacy systems).
Most portals products in the market, like SharePoint, provide an ability to build web parts (variously called portlets, widgets, or gadgets). Each of these web parts can be connected to different systems/sources. Two or more such web parts drawing data from different sources when hosted on one page of the portal provide a user with single interface to monitor multiple underlying applications. Composite applications built with Web parts take it one step further by allowing each of the single-page hosted web parts to fetch data for a common query. As an example, if we are building a composite case management solution and if the underlying web parts need to draw data from multiple sources such as Documentum, a relational SQL database, eRoom, or CRM, we probably would want each of the corresponding web parts to retrieve data for a particular case (be it by name, description, or specific case number), and we probably would want to enter the case details that we are searching for in one place as opposed to entering it multiple times in each of the web parts separately and let the corresponding web parts get their relevant content. In other words, we would want the web parts to be connected to our master case search web part. To make this composite application a killer application, we would need to add AJAX to the composite application modules.