a domain that points to a folder within your web folder
a fully functional domain that can be created from within your control panel
a fully functional domain that will work out of a folder in your main sites ftp
a regular registered domain name that points to a subdirectory in the main site
An addon domain is a domain parked on a subdomain of the main domain, and pointed to a subdirectory of the main site. Therefore you can have several domains hosted in the same account and pointing to different content. Addon domains can have their own POP accounts and can not have subdomains. The advantage of having addon domains is you can manage them and a main domain with a single control panel.