Basically a VLAN will turn a switch into many virtual switches. A BVI can make it seem that multiple interfaces on different routers are actually part of the same "switch".
For example assume you had two routers, A and B. Each one has a serial WAN connection (T1) to each other, and a ethernet LAN. If you wanted you could put all 4 interfaces into a BVI and it would appear to the end-users at both sites that they were on the same local segment as the other hosts. This is very useful if you need something to work within the same Ethernet segment (ie, it does not pass any L3 hops).
HTH