When I first started freelance editing in 2002, there was real confusion over the difference between traditional publishing, self-publishing, and vanity publishing (also called subsidy publishing or fee-based publishing). Ten years later, the confusion remains—in fact, with POD publishing and the advent of such companies as CreateSpace, Amazon, and Lulu going into the book production business, the confusion has only grown. I recently came across a great article by Michael J. Dowling (with Carol White) that succinctly describes the differences between and the pros and cons of each of these three methods of publishing.
Note: the article briefly mentions POD publishing. When you hear the term POD publishing, keep in mind that print-on-demand is not a method or business model of publishing. POD is simply a technology—printing one book at a time, on demand, on a big laser printer. It can be used within the framework of any of those above three methods of publishing.
Michael J. Dowling’s article is unfortunately no longer online. For more on this topic, please visit my page Self-publishing or traditional publishing, where you can read my more recent summary of the differences between true self-publishing, subsidy publishing (using a publishing services company), and traditional publishing.