Is MPLS a Layer 2 WAN technology equivalent to ATM and Frame Relay? If not, what OSI layer does MPLS function at and what network services does it provide?
You can define the MPLS at 2.5 layer of OSI it means between datalink and the network layer... You will find the MPLS in the service provider network to achieve the fast switching or trnsport of the data packet... on the top of that you will have many application running like VPLS/Metro ethernet... right now term called "triple play" which is nothing but carring IPTV, Internet and Voice service on the network which is running on the top of MPLS back bone...
Ray, MPLS cannot be mapped into any specific layer. Although since it functions between layer 2 and 3, its sometimes referred to as a layer 2.5 protocol.
It is capable of doing label switching, and this function can be used for doing network switching as well.
So essentially it delivers all the network service which are possible using your network today and some more as MPLS VPN's, Multicast VPN's etc. (but these are more of a value adds exploting the MPLS function using other protocols in tandem like BGP and PIM for eg.)
To summarize its more of a layer 2.5 protocol (although its technically not classified into any layer, but its used after the layer 2 processing and before the layer 3 processing, hence the unconventional name layer 2.5). And its does network traffic swithching using labels instead of IP address, and potentially can deliver all the service used today and more as explained with some examples above.