Model and Model store :
>> The earlier release of Microsoft Dynamics AX stores the metadata in the application files which is AOD files.
>> In AX 2012 all the file based AOD files are replaced by SQL Server database based, which are called by Model Store.
Models and Model Files :
>> Models are logical group of element like tables and classes. In AX 2012 elements can be group and store in the model file.
>> Model files are easy to create, export, import and this can be uninstalled from the system when not required.
>> Each layer consists of one or more models. Each layer contains one system-generated model that is specific to that layer.
>> Every element in a layer belongs to only one model. In other words, no element can belong to two models in the same layer, and every element must belong to a model.
>> A default model owned by Microsoft exists in each layer. Default models cannot be modified.
>> A model is permanently associated with the layer that the model was created in.
>> If you need to move one of your models from one layer to another, you must create a project from the model in the Application Object Tree (AOT), export the project as an xpo file, create a target model in the desired layer, delete the original model to avoid having to resolve layer conflicts, and import the xpo file to the target model. If you are moving elements between models in the same layer, you can use the Move to model command in the AOT.
>> Models are stored in the model store. The model store is a database in which all application elements for Microsoft Dynamics AX are stored.
>> Customizations are also stored in the model store.
>> The model store replaces the Application Object Data (AOD) files that were used in earlier versions of Microsoft Dynamics AX.
>> Models that have been installed in the model store are used at run time.
>> In Microsoft Dynamics AX 2012 R2, the model store was moved into a database that is separate from the business database.
>> Models were introduced in Microsoft Dynamics AX 2012 to help partners and customers more easily install and maintain multiple solutions side by side in the same layer.
Hope this info. proves to be helpful to you... :)