SAP stands for Session Announcement Protocol. It's defined in  (cache). It's a distributed directory of announcements of streams and uses multicast to effeciently distribute these announces on the Local Area Network or on the MBONE. It uses SDP's to describe streams so that you can open the stream via RTSP?.
This technique will allow you to have a lot of server produce streams (often multicasted) and announce themselves on the network. The clients on the network can then listen for these announces. VLC can do this with the sap interface. You then get a listing of all these streams and can simply 'tune' into the stream of your choice.
It can also work for Internet telephony (SIP) for instance.
Example of what is announced via SAP on the MBONE: http://www.uninett.no/multimedia/streamingguide/alle.html