Jam contains pieces of the fruit with in the spread. Oftentimes jam is also called preserves. Many jam recipes call for pectin in them. Pectin comes from plants and is used as a gelling agent. I personally am not fond of using pectin in my jam. No specific reason - just would rather avoid it. It may just be a case of mistaken identity but since I don't 100% know what store bought pectin is made of, I just avoid it all together.
Jelly is a clear or translucent fruit spread made from the fruit juice. Pectin is sometimes used in jelly also. Jelly cooks up the same as Jam with the additional step to remove any pieces of fruit from the spread.
And just to throw another one in there: fruit butters (i.e.: apple butter).
Fruit butter is made of fruit puree, sugar and spices. It is cooked down to a thick consistency but can be spread.
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