The command is simply open (which can also be used for opening directories). The most basic example of launching an application:
open /path/to/some.app

More complex possibilities also exist:
open "/Volumes/Macintosh HD/foo.txt"
opens the document in the default application for its type (as determined by LaunchServices).

open /Applications/
opens that directory in the Finder.

open -a /Applications/TextEdit.app "/Volumes/Macintosh HD/foo.txt"
opens the document in the application specified (in this case, TextEdit).

open -e "/Volumes/Macintosh HD/foo.txt"
opens the document in TextEdit (the -e option specifies TextEdit).

open http://www.bizhat.com
opens the URL in the default browser (lynx, naturally *wink*)

open "file://localhost/Volumes/Macintosh HD/foo.txt"
opens the document in the default application for its type (as determined by LaunchServices).

open "file://localhost/Volumes/Macintosh HD/Applications/"
opens that directory in the Finder.