Just spoke with the dude that i have hosting with.
1) A Parked Domain
This effectively is 2 domains that point to the same account. Parking a domain means that both addresses will work for the website and email accounts can be set up for each domain.
2) An Addon Domain
This is where you add a domain to your account which points to a specific directory within your hosting. This can be for a second website or a seperate division of an existing website. EG:
www.seconddomain.com woud point to
www.firstdomain.com/anydirectory/
There is one common downside to both solutions about, the Search Engine Optimisation will be near as dammit non-existant. Domains which are parked or added on will not be indexed accurately (or at all) by search engines, and if they are the URL's indexed are usually that of the primary account address. The solution to this is to purchase additional accounts for important websites.