A .FOB-file (Financials OBject file - Navision Financials was the original name for the first Windows version of Navision) is a binary file containing one or more Dynamics NAV objects.
The alternative to use a FOB file is to use a .txt file. When you
export an object you can choose either .fob or .txt formats (.txt
formats only if you have a developer license).
When a new version or other changes is distrubuted, then it's most often done by using a FOB-file, as you can only create new standard/protected objects by importing .fob files. If you're importing a .txt object file, then Navision will check you license to see if you have permissions to create the object.
If you opens then .FOB-file with a text-editor (ex. Notepad), then you'll see that the FOB-file contains a header in text-format, describing the included objects.
You import and export the FOB-files from the Object Designer.
Learn more about FOB files