LAN stands for Local Area Network. This is sometimes referred to as the INTRANET. This is a network that is only accessable to computers inside a protected environment, usually behind a firewall. These computers can usually easily connect to one another, but go through special network gear to reach the INTERNET. This gear can consist of a router or or another computer. Either one provides an I.D. for the internal computer to use which can be seen by the outside world. This device is referred to as a Proxy. It allows the internal computer to access the external network without revealing it's internal identity.

WAN stands for Wide Area Network. This is usually the Internet, though several LANs can be connected together as a WAN (meaning each LAN requires a proxy to access a system on another LAN) while still not accessing the Internet. LANs are usually protected from WANs by a firewall that blocks intruders. While a LAN usually has very controlled security, a WAN is usally very open and can accept anonymous connections. If they didn't, you wouldn't be able to access web sites without a password or special security hardware or software.