SQL Server can act as an application server by the means of endpoints (listeners). These can be defined over TCP or over HTTP, and support SOAP, TSQL, service broker, and database mirroring payloads.
To create a SOAP endpoint, create the stored procedures or functions that provide the functionality. Then run a CREATE ENDPOINT ... AS HTTP... FOR SOAP. Important parameters: SITE, and the WEBMETHODs collection.
A SOAP request returns an object array or a DataSet object. The default SOAP wrapper is created by Visual Studio.
This is quite nice. If you need to use a data-centric web service, just create one directly in SQL. To use it, just define the Web reference in the VS IDE; this will make an object of type SITE with a endpoint member you can access the data exposed by the SQL Server (e.g. If your SITE parameter was set to 'mySite', and the endpoint was named 'myEndPoint', you have a mySite object available which has a myEndPoint member, which exposes the functions/stored procedures defined on the SQL Server).