JNLP specifies the format of an XML-file that describes the application. It tells the Web Start plugin where to find the jars, who created it, what it is, a homepage with more info, requirements, etc. Basically all the stuff that the Web Start plugin wants to show to the user or needs to install your application correctly.
You put a link to the JNLP-file in your HTML and the plug-in takes care of the rest. Quite convenient.
PS.
Here you can find more info on the JNLP file format.
[ April 18, 2002: Message edited by: Wouter Zelle ]