Many computer users don't know the difference between a tower and a modem when it comes to what you call it.  Hopefully, this brief list of terms will help!

General

  Desktop Computer System/"Desktop"/"System"/PC/Personal Computer
The term "desktop" gets thrown around quite a bit when people talk about computers.  The term "desktop" actually is a reference to older model computers from the late 80's and early 90's - these machines were built to lie down horizontally, on "top of the desk", with monitor sitting on top.  This over time adapted into "desk top", and hence, "desktop" today.  Nowadays, desktop is used to refer to pretty much any type of computer, with the exception of a laptop notebook.

  Laptop/Notebook/Portable/Portable computer
Take one guess as to why the laptop computer is called that.   Yes, it's just as simple as it sounds...it was designed to sit in your lap while working.  Couldn't be simpler.  As technology improved in the mobile computing environment, the term "notebook" became more widely used, as a mobile computer was no longer just a computer, but could be a functional "office space".  Regardless, I call them laptops, and probably always will :)

  Tower
The tower itself is the computer assembly containing all the devices that make your computer run.  They can be positioned horizontally (most older systems are horizontal mounts) or vertically, which seems to be the standard in today's computing age.  To use the tower, plug in a monitor, keyboard, mouse and power cord, and you're off and running!

  Case
Commonly and mistakenly referred to as the "tower", the case is the outside chassis of the computer, into whch everything else fits.  By itself, it is just a shell, usually made of a combination of plastic or metal.  Think of the case as an egg shell with nothing inside.


The internal hardware:

  Power supply
The power supply provides the necessary voltage to power your motherboard, all the devices attached to the motherboard, and also your hard drives, CD drives and floppy drives, which have their own power connection to the power supply.  A common failure with computers, as it is the first device in the "chain" of electricity.  If your computer died after a lightning storm,  the power supply is the first thing to check.  Power provided is in Watts, and (depending on the power needed and number of devices to power), range from 200W, upwards of 1000W.

  Motherboard/main board/system board
Think of the motherboard as the "traffic cop" of your system.  Within the confines of all the circuits and gizmos is a highly-developed network of highways.  If you've ever seen Minority Report with Tom Cruise, think of the scene where the cars are zipping all over the place, zigging and zagging up buildings and around corners.  That's the way a motherboard works, ensuring that all data and process instructions get to their correct destination.

  CPU or "processor"
If the motherboard is a traffic cop, the processor is Chief of Police.  All computer instructions begin with the processor, and control all aspects of your computer.  Modern processors now have 2 or more sub-processors built onto the same chip (commonly seen as Dual-Core or Core Duo).  Advanced computers and servers can have even more sub-processors on the same chip.  The more processors, the more power!

  RAM or "memory"
RAM is probably the most vital component of your system.  It is also the cheapest and easiest to upgrade!  Simply put, the more memory your computer has, the faster and better it will perform.  However, the amount of memory you can install is limited to your motherboard architecture, so make sure you don't get too much!  (Check here for your system to see how much memory you can run)  Also, be aware that Windows XP 32-bit systems (the most common) cannot "see" more than 3GB (gigabytes) of RAM, so if your motherboard can support 4GB, don't bother getting any more than 3GB total.

  Hard drive/hard disk/disk drive/hard disk drive
Without a doubt, the most fickle component in your computer.  There is absolutely no way to know how long a hard drive will last.  Some hard drives I bought and used in the early 90's are *still* working today.  My first purchased hard drive that I can remember was a 2.5GB Western Digital.  I paid $379 for it at Egghead Computers in Memphis.  Now, you can get an entire computer for $379 - even a laptop!  A hard drive is a device that stores data.  It doesn't get much simpler than that.  Inside the drive is a read/write head, similar to a stylus on a record player.  This read/write head, driven by a electromagnetic field, "writes" 1's and 0's to one or more platters inside the drive.  The head actually hovers over a cushion of air about 1/1000 the size of a human hair.  Most hard drives are shock-rated to withstand a pretty hefty impact, such as falling to the floor from 3-4 feet in the air.  However, a single speck of dust inside the drive can (and usually will) render your drive into the most portable boat anchor ever made.  And there's nothing you can do it about ...except back up your data often!

  Modem
Analog modems were used by all in the days before high-speed internet became commonplace.  The fastest analog modem made transferred data at a rate of 56KBp/s, roughly 1/20th the speed of today's average high-speed connection.  The modem is a card that installs onto the motherboard.
  CD/DVD drive
CD and DVD drives are primarily internal, but also available in external, devices that are used to play content from a CD-ROM or DVD-ROM ("DVD"), respectively.  Modern drives are almost always CD-RW or DVD-RW, meaning that these drives have the ability to actually record data onto a CD or DVD.  The CD drive, as a data-reading device, has almost been completely replaced by the DVD drive, and with the popular release of Blu-Ray technology, the DVD will eventually also go the way of Betamax.

The "peripherals", or external hardware:

  CRT monitor
Device used to view output from your computer on a physical display.  CRT monitors are heavier and bulkier, and range (on average) from 14" to 21".  They are being replaced in the public market by LCD flat-panel displays.

  Flat-panel/LCD display
Like the CRT monitor, also used to view output from your computer.  However, LCD flat-panels are lighter, much sharper and have a much smaller "footprint", making them quite popular for many desktop computer users.  That translates into more space on your desk for other junk :)

  Mouse
A mouse is an external device that you plug into your computer, and thereby allows you to move a cursor anywhere on the screen you wish to put it.  The most basic mouse you can find today are generic, 2-button mice, and they usually run about $7-$15.  On the upper end of the scale, you've got "comfort" mice that are ergonomically designed to prevent wrist strain and carpal tunnel, and now the popular item is wireless.  I've seen some high-end wireless mice in the $80-$100 range.  It just really depends on what you need it for.  If you are a gamer, you're going to want a mouse with lots of bells and whistles.  If you use your computer to surf the net and check e-mail, and standard "wheel" mouse will do just fine.  With mice, more expensive does NOT mean "better".  Better is whatever works for you, feels good in your hand, and falls in the range of what you want to spend.

  Keyboard
Keyboards, like mice, are external peripherals that allow you to input instructions into your computer.  You use your keyboard to type documents, name files, type web addresses ...pretty much anything that involves letters.  Like mice, they go from basic and cheap 104-key keyboards to expensive wireless, all the bells and whistles varieties.  Again, get what works for you, and you'll be fine.

  Printer
Printers are like cars ...it all depends on what you want and need.  There are the basic printers ..bubble jet and ink jet ...then you move up into laser printers.  Laser printers are more expensive, and the toner is much more expensive (as opposed to "ink" for ink jet printers), but the quality is much sharper and usually they spit pages out much faster.  There are about a zillion different models on the market now - most take advantage of our digital fascination, so they usually include media card readers (SD, XD, XD micro, etc), from which you can pull directly out of a digital camera and plug right into your printer and print.   Personally, I have a Brother 665CW photo quality printer, with built-in wireless ...and LOVE it!  But again, it all depends on what you want, and what you need.  Base price for a printer is usually $50-60 ..."average" market printers will run you $120-$150, and the color laserjets will run you $500+.

  External hard drive
If you read the section above about hard drives, you will understand how important it is to have an alternative backup solution for your data.  An external hard drive is a very simple solution for data backup.  You just plug it into a USB or Firewire port, and you will then have a new drive letter under "My Computer" to write data to.  You can also setup an automated backup solution using Windows™ built-in Scheduler program, or you can download a 3rd-party program.  Either way, it's important to backup your data as often as possible.  The more copies of your data you have, the less chance you will have of ever losing critical data.

  Flash drive/thumb drive/portable USB drive
If you read the section above about hard drives, you will understand how important it is to have an alternative backup solution for your data.  An external hard drive is a very simple solution for data backup.  You just plug it into a USB or Firewire port, and you will then have a new drive letter under "My Computer" to write data to.  You can also setup an automated backup solution using Windows™ built-in Scheduler program, or you can download a 3rd-party program.  Either way, it's important to backup your data as often as possible.  The more copies of your data you have, the less chance you will have of ever losing critical data.
 

Networking:

  DSL/Cable modem
A DSL or cable modem is a device that is used to bring high-speed internet into your home or office.  Simply put, your ISP (internet service provider) sends either DSL service (via your phone line) or cable internet (through your standard cable connection) into the modem.  You can plug your computer directly into your modem to get internet, or you can run the internet from the modem to a wired or wireless router, to either have wireless internet, or allow multiple computers to access the same internet connection.  DSL/cable modems are very easy to setup, as your ISP usually takes care of that for you upon service installation.

  Router (wireless router shown)
A router allows multiple computers to network with each other.  It also allows, if high-speed internet exists, these computers to access the high-speed connection on each computer connected to the network.  My recommendation for networking equipment is Linksys, without a doubt.

  Switch
A switch is the predecessor to the modern multi-port router.  These were popular before wireless internet existed, and were the easiest method of networking multiple computers together.  They were also capable of sharing internet connections as well, but only a handful of switches were truly reliable.  My recommendation for networking equipment is Linksys, without a doubt.

  Ethernet/Cat 5/RJ-45 cable
An ethernet cable, commonly called "Cat 5" is the cable used to connect a computer to either a router, switch or DSL/cable modem.  The standard cable is 6ft, but you can find them from 3ft to 100ft.  Note: you should never run a single cable longer than 300ft, as attenuation will degrade your connection speed dramatically.

The techie stuff:

  USB or "universal serial bus"
USB is one of several ways for devices to communicate with your computer.  The vast majority of external devices on the market are USB.  Click here for the full Wikipedia description of USB.

  Firewire/IEEE 1394
Firewire is another way for a device to communicate with your computer.  Firewire is similar to USB, but much faster.  Click here for the full Wikipedia description of Firewire.

  RPM (as it relates to hard drives)
Just like your car engine, your hard drive rotational speed is measured in RPM (revolutions per minute).  Your lower-end hard drives are usually 5400rpm; middle of the road drives are 7200rpm, and higher-end drives, usually found in large servers, run 10,000-15,000rpm or more.  Now, imagine your car running at 7,200rpm 24 hours a day, 7 days a week, 365 days a year....pretty amazing, huh?


  BIOS (Basic Input/Output System)
The computer BIOS, or Basic Input/Output System, is a hard-coded set of instructions that is used to identify, test and prepare computer components for software to be run.  Click here for the full Wikipedia description of BIOS.  Word of warning: when updating firmware, ensure that the computer does NOT get restarted during the process.  You could irreparably damage the hardware to the point of it being unusable.

  Firmware
Simply put, firmware is a program, or series of programs, that controls a particular device.  Most all hardware, such as routers, CD drives, etc have firmware that can be updated (if needed).  Word of warning: when updating firmware, ensure that the computer does NOT get restarted during the process.  You could irreparably damage the hardware to the point of it being unusable.  Click here for the full Wikipedia description of firmware.

  Front side bus
Ummm...there really is no simple explanation of what Front Side Bus speed is ...click here for the Wikipedia description of Front Side Bus.

  Megahertz (MHz) vs Gigahertz (GHz) / processor speed
This is the speed at which the processor runs.  One hertz (Hz) is one cycle per second.  One megahertz is 1,000,000 (1 million) cycles per second.  One gigahertz is 1,000,000,000 (1 billion) cycles per second.  The next step up will be terahertz, which is (will be) 1,000,000,000,000 (1 trillion) cycles per second.   Here is an interesting explanation of how processor speed is measured.

NOTE: Most experts speculate that this technology is at least 10 years away.  However, I believe by 2015, we will be there, if not REALLY close to it.
(time capsule moment: today's date is 01/23/09)