Tilak is applied at the Ajna Chakra, the space between the two eyebrows.
It has a very cooling effect. Application of sandal paste has great medicinal value, apart from the spiritual influence. Application of sandal paste will nullify the heating effect when you concentrate and meditate at the Bhrumadhya.
Tilak or Thilakam indicates the point at which the spiritual eye opens.
Vibhuti expresses the concept that this world we live in and the universe are driven by the functions of creation, preservation and destruction as enacted by the Triad(Thrimurthys) Brahma, Vishnu and Siva. It also signifies that the three Murthies, in the triad are equal. The significance of Vibhuthi is that the body is to be transformed in to ash one day, hence the morality of all men and women born in this world. With this realization we should overcome the ego and selfishness in us and conduct our lives in the righteous path.
Vaishnavas call their representation of Namam on their foreheads as Thirumann, which means the sacred earth (dust). Namam consists of three vertical lines joined at the base, the two outer whitelines signifying the worship of Brahama and Vishnu and the red centerline signifying the worship Mahalakshi. The Namam(thirumann) signifies the fact the men and women of this world will all be transformed.
Tilak in the form of Safron or Kunkum also is applied in the Ajna Chakra.