Ok.. here goes nuthin! :)
In order to participate in Pay-Per-Click Advertising, you must sign up with Google AdWords, YSM, Microsoft adCenter or some other search network. Once you sign up, you can create ads and place bids on relevant search keywords. The higher the bid, the better the placement. The more relevant keyword(s), the more targeted audience. When someone searches for those keywords, your ad is displayed at the top or alongside the search results. If someone clicks on the ad, your account gets debited. In other words, you pay-per-click. ;)
SEO ... stands for Search Engine Optimization. SEO techniques can be done on your own. The idea is to optimize both the on-site information and various off-site factors in order to enhance your website's visibility in the major search engines. For more info on SEO - try looking into the DaniWeb SEO forums.
PPC provides paid traffic to your website via google adwords, Yahoo Search Engine Marketing, MSN Adcenter, AOL..
On the other hand with SEO you try to get the free traffic from the search engines by optimizing your site for different keywords.