Frame Relay is a high-performance WAN protocol that operates at the physical and data link layers of the OSI reference model. It is a simplified form of packet switching similar to X.25 but switches packets faster with no guarantee of data integrity. Frame Relay uses virtual circuits identified by DLCIs to transmit variable-length frames between DTE devices. It provides both permanent and switched virtual circuits. While Frame Relay allows for more efficient bandwidth usage, its variable frame delays make it unsuitable for real-time applications.