Are you familiar with anime and manga, or just completely confused? If so, here are some definitions -- as well as an explanation of both -- to help you out!
Thanks to Bob Nelson, who provided us with the basis of this FAQ!

So What Exactly Is Anime, Anyway?
Note: Anime, is technically pronounced AH-nee-may...but most Americans pronounce it "ANN-i-may".

Anime is the Japanese translation for "animation", which means it defines any movie, video, or TV episode that is animated. America's definition of the term is any animated feature that is produced in Japan. To America, anime is considered a small genre. Yet, in Japan, it encompasses its own genres. Examples of genres of anime include shoujo (anime which is aimed at girls), shounen (anime aimed at boys), and hentai (aimed at the 18+ audience). Animated cartoons are taken much more seriously in Japan than America. For example, American animated cartoons are either made for a younger audience (Example: Johnny Bravo), or an adult audience (South Park). However, in Japan, anime can be aimed at a young audience (My Neighbor Totoro), a teenage audience (Yu Yu Hakusho), or an adult audience (Urosukidoiji), as well as many other groups.

The art of anime differs dramatically from American cartoons. A prime example would be facial expressions. When characters talk in anime, they may use unusual facial expressions when they speak, while in most American cartoons, realistic facial expressions are used more often. Also, the shape of the eyes can symbolize what type of personality an anime character has. More symphathetic or cute characters have large, light colored eyes (like Sasami from Tenchi Muyo!) while evil characters have smaller and much darker eyes (Vicious from Cowboy Bebop).

The style of most anime drawings was established by Osamu Tezuka (a.k.a. "The God of Manga"). His style was highly inspired by the creations of Walt Disney, and therefore, the animation styles of American animation and Japanese animation are directly connected. The artwork in anime movies and TV series are at least loosely based off of Tezuka's creations.

Another thing that seperates anime from American cartoons is plot. Anime explores adult-oriented concepts and incorporates elements that are intended to draw a large amount of emotion from the audience, whether it be sadness or laughter. The plots that are implemented in anime are, for the most part, much more sophisticated than the plots of American cartoons. The intricate designs and personality development of the characters within anime are the supports for a plot as well.

Japan is more open to adult content in their animation in general. The Japanese are not affected by non-sexual nudity (casual nudity), or by profane language and gore in their anime. However, even Japan has its limits. A prime example would be Cowboy Bebop, which was taken off the air after 12 episodes because of its extensive violence, drug usage, and nudity.

And What About Manga?
Manga is simply the Japanese word for "comics". However, manga differs from American comics in several ways. The first, and most notable difference, would again be the style. While American comics pay distinct attention to color, manga is always produced in black and white. Also, manga tends to be much more personal to the artist, or manga-ka -- for example, it's very common to have a random sidebar on a page where the artist talks about something completely random. Also unique to manga is the range of genres. Unlike in America, where superheros seem to be the most popular comic subject, the Japanese produce manga about almost any subject one could think of. Children's manga, young people's manga, adult manga, business manga...they have it all. Plus, in Japan, there isn't so much stigma attached to reading manga past one's teenage years. In short, there's a manga out there for everyone.

The chief inspiration for most anime tends to be manga. Many stories are first produced by an manga artist and, if popular, are picked up by a production company and animated. When a manga becomes an anime, the storyline is usually condensed and sometimes changed altogether so that the show can air in the allotted amount of time (most shows tend to be 26 episodes). Thus, lots of people would say that manga is actually better than anime...but it's really just a matter of opinion.

Popular Anime/Manga Terms
Because anime and manga are Japanese, non-Japanese fans have created quite an interesting lexicon of words that are used often. Below are some of the most popular terms...