The full area damaged by the missile impact. The specific target of the missile takes full damage, while all else in the blast radius takes half damage.
Example: A grenade or mini-missile that does 5D6 M.D. inflicts the full 5D6 damage to the target it strikes (or lands at the feet of), and everything else within the rest of the blast radius suffers half the the rolled damage for the explosion.
Note that the concussive force of an explosive blast may not damage or seriously hurt grass, tiny items and other flexible or resilient S.D.C. materials. However, people, animals, building, etc., all suffer the blast radius damage.