An addon domain is a fully functional domain that can be created from your cpanel. Once it's created it will have it's own email, and it's own folder from within the public_html directory.

Addon domain url's look like www.domain.com Sub domain url's look like forum.domain.com cat.domain.com etc.domain.com the www is replaced with anything you want. Parked domains are a place holder site. You park it on top of another site and it becomes a single page of the site you park it on.