<p>I have a ClickOnce environment like this:</p>
<p><code>\\Fileserver\ClickOnceApps\App1.application</code></p>
<p><code>C:\Documents and Settings\user\Start Menu\Programs\publisher\app1.appref-ms</code></p>
<p>My understanding is the .apppref-ms file is a glorified link to the app.application file. Does it do anything else?</p>

If you open the appref-ms file in a text editor you'll see it contains the Url for the application, culture, processor architecture and key used to sign the application, so yes, it's just a link.
The difference between those "Application Reference" files and shortcuts (.lnk) is that the application reference points to the original application Url and not the location of the exe on disk, when you run the appref-ms file the system knows how to find the copy of the program on the local disk and run it from there without accessing the Url (this is not accurate and depends on settings in the ClickOnce manifest, but its a close approximation).