Difference between parked and addon domain

Can someone please explain to me the difference between a parked and an addon domain in cpanel?

[Jordan]

A parked domain is a domain sitting on top of another domain. For instance, say you have two domains - http://www.mysite.com and http://www.my-site.com. If one of these domains where parked then both sites would point to the same webpage/site.

An addon domain is a different site usually hosted in the sub directory of your main website. Using the above example each URL would point to a different site.