An excerpt is a condensed description of your blog post and refers to the summary entered in the Excerpt field of the Administration > Posts > Add New SubPanel. The excerpt is used to describe your post in RSS feeds and is typically used in displaying search results. The excerpt is sometimes used in displaying the Archives and Category views of your posts. Use the Template Tag the_excerpt() to display the contents of this field. Note that if you do not enter information into the Excerpt field when writing a post, and you use the_excerpt() in your theme template files, WordPress will automatically display the first 55 words of the post's content.

An excerpt should not be confused with the teaser, which refers to words before the

in a post's content. When typing a long post you can insert the

Quicktag after a few sentences to act as a cut-off point. When the post is displayed, the teaser, followed by a hyperlink (such as Read the rest of this entry...), is displayed. Your visitor can then click on that link to see the full version of your post. The Template Tag, the_content() should be used to display the teaser.

Reference http://codex.wordpress.org/Glossary

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