Authentication
An authentication system is how you identify yourself to the computer. The goal behind an authentication system is to verify that the user is actually who they say they are.

Authorization
Once the system knows who the user is through authentication, authorization is how the system decides what the user can do. A good example of this is using group permissions or the difference between a normal user and the superuser on a unix system.

Read More
http://www.acm.uiuc.edu/workshops/security/auth.html
http://www.iis-resources.com/modules/wfsection/article.php?articleid=7