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Level 20 is the max level before epic levels in D&D 3.5e and some games don't even use epic levels, so if you apply a template with a level adjustment (e.g ghost with a LA of +4) at level 20 what happens? Does the LA just do nothing as no more leveling up will occur or is it impossible to apply the template?

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Nothing. Your ECL is 20 + the LA, which is used to calculate the XP necessary for the next level, but there is no XP necessary for the next level because there is no next level, so your ECL no longer has any relevance.

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