BADIs (Business Add-ins) are used to make some enhancements in SAP standard programs.

They can
be inserted into the SAP System to accommodate user requirements too specific to be included in the
standard delivery.

Whereas BAPIs (Business API(Application Program Interface)) are used for interfacing between two
systems. They are remotely enabled function module ie it can be invoked from remote programs like
standalone JAVA programs, web interface etc..

Function Modules are used in SAP programs to modularze the programs. They are Global ABAP
programs created by SAP for reusable purpose. They have IMPORT,EXPORT and TABLE parameters,
and EXCEPTIONS to through when error occurs.
You can create them from TCode SE37.They are similar to Functions we have in C, but with more
functionality

Difference Between BADI and User Exits

Business Add-Ins are a new SAP enhancement technique based on ABAP Objects. They can be inserted
into the SAP System to accommodate user requirements too specific to be included in the standard
delivery. Since specific industries often require special functions, SAP allows you to predefine these
points in your software.

As with customer exits two different views are available:

In the definition view, an application programmer predefines exit points in a source that allow specific
industry sectors, partners, and customers to attach additional software to standard SAP source code
without having to modify the original object.

In the implementation view, the users of Business Add-Ins can customize the logic they need or use a
standard logic if one is available.

In contrast to customer exits, Business Add-Ins no longer assume a two-level infrastructure (SAP and
customer solutions), but instead allow for a multi-level system landscape (SAP, partner, and customer
solutions, as well as country versions, industry solutions, and the like). Definitions and implementations of
Business Add-Ins can be created at each level within such a system infrastructure.

SAP guarantees the upward compatibility of all Business Add-In interfaces. Release upgrades do not
affect enhancement calls from within the standard software nor do they affect the validity of call
interfaces. You do not have to register Business Add-Ins in SSCR.

The Business Add-In enhancement technique differentiates between enhancements that can only be
implemented once and enhancements that can be used actively by any number of customers at the same
time. In addition, Business Add-Ins can be defined according to filter values. This allows you to control
add-in implementation and make it dependent on specific criteria (on a specific Country value, for
example).

All ABAP sources, screens, GUIs, and table interfaces created using this enhancement technique are
defined in a manner that allows customers to include their own enhancements in the standard. A single
Business Add-In contains all of the interfaces necessary to implement a specific task.
The actual program code is enhanced using ABAP Objects. In order to better understand the
programming techniques behind the Business Add-In enhancement concept, SAP recommends reading
the section on ABAP Objects.

User exits are implemented using ordinary function modules. Where as BADI's are implemented using
Object Oriented concept.

Once the user exit is implemented and included in a project you cannot use it for any other purpose. But
BADI's can have multiple implementation.

BADI acts as an interface for SAP business processess.

Difference between BADI and USER-EXIT.

i) BADI's can be used any number of times, where as USER-EXITS can be used only one time.
Ex:- if your assigning a USER-EXIT to a project in (CMOD), then you can not assign the same to
other project.
ii) BADI's are oops based.

OSS notes or SAP Notes (OSS is the old term!) are corrections/fixes found in the SAP service
marketplace. A note can range from simple consulting type advice to complex corrections and corrective
steps.
There are two ways to connect to the notes search system. They are:
1. The web frontend via your browser at http://service.sap.com/notes
2. The SAPGUI for Windows frontend via transaction OSS1 in your SAP system. must be preconfigured
by your system administrators

The notes contain instructions and in some cases code corrections. The code can be applied manually
via the developer tools or via transaction SNOTE which will try to automatically step you through the
application process.
(Please note that J2EE notes are applied differently - I'll only over the ABAP server which SAP BW
predominately uses in this response.)

Where the correction is complex and/or not a high priority it maybe that the code is delivered in a Support
package and no "advance" code is provided. In this case you have to apply a collection of fixes together
at once. This is usually done by your system administrators.