The Business Data Catalog (abbreviated as "BDC") is a feature of Office SharePoint Server 2007, that enable you to surface business data from various LOB applications such as SAP, Siebel and databases in Office SharePoint Server 2007. To achieve this goal, Business Data Catalog provides homogeneous access to the underlying data sources with a metadata model that provides a consistent and simplified client object model, which consists of applications and entities.
The BDC connection panel is displayed when you select the Business Data Catalog option from the Data Source Type combo:
The web part will enumerate the available applications in the Application combo. For each application that you choose the web part will enumerate the available entities in the Entity combo.