Areas of Focus, according to pages 205-6 of the GTD book are roles, job descriptions, or areas of responsibility.
Generic examples from the book:
Professional: staff development, marketing, facilities management, asset management.
Personal: parent, spouse, health, community service, home management, financial management, creative expression.
My areas of focus are:
Personal: academia, father, financial freedom, fitness, health, home, husband, renewal, son.
Work: finance, human resources, information technology, inventory control, manufacturing management, office, property management, purchasing, and sales.
My system is a digital, hierarchical list. In plain English: it's an outline. I use Areas of Focus as the top level of the outline.
The level beneath the area of focus is the project. The level beneath the project is the action.
For example:
Area of Focus: Manufacturing Management
Project: Both label printers running
Next Action: call Barbara to find out if cutter-stacker shipped
Area of Focus: Academia
Project: Fall 2008 course prepared
Next Action: photocopy plagiarism reporting form
Any time that I enter an action into my trusted system, I put it under an area of focus.
I found it a useful exercise to create these areas of focus. If you use your system regularly, you will quickly find out if the areas you have created work for you. If you keep creating projects that have no clear area of focus, you need to revise your list of areas.
I don't use LifeBalance, but I believe that what they call Top Level Items correspond to areas of focus.
One possible objection to my use of areas of focus is that there can be some ambiguity and lack of clarity regarding their borders. For example, I am taking a week's vacation in August. I will do this with my wife and my son. Is the vacation about my own Renewal, is it about being a good Husband to my wife, or is it about being a good Father to my son? It's all of these. In my description of each area I have noted that vacations go in renewal, but there will always be some fuzziness. In actual practice, I haven't found this to be a problem. Since my list is digital, I just do a digital search for "vacation" to find the relevant action.
From a broader perspective, I find it useful to see all my Purchasing projects together in one place, all my Sales projects in another, and all my Home projects another. It's an excellent way to organize my actions and projects. It is important to note that areas of focus are independent of contexts. I might have a next action to buy a mousetrap. Its context is "Errands" while its area of focus is "Home." I might have another next action to review the GTD book's discussion of file folders. Its context would be "Home" while its area of focus would be "Office."
It takes but a second to put each action in an area. It also clearly demonstrates that many areas of focus do not have a whole lot going on while other areas are bursting at the seams.