Recently I was asked what exactly Application File Privilege found under Core Records affects within CRM. After some research on the topic I found that it holds Schemas and Templates as mentioned below :
RibbonCore
AdHocReportTemplate
RibbonWss
FormXml
RibbonTypes
SpreadsheetMLTemplate
One of the practical usages of AdHocReportTemplate is to apply changes to your Ad Hoc Reports by modifying this template. Here is a link that demonstrates how to do so : http://blog.sonomapartners.com/2008/11/customizing-the-report-wizard-template.html