What's the Difference Between SEO and SEM?

To the unitiated the difference between Search Engine Optimisation [SEO] and Search Engine Marketing [SEM] must seem invisible or confusing. Not to mention the alphabet soup of other terms and acronymns such as PPC, CTR, etc. I’ll quote and link to a couple of fairly simple explanations.

“Search Engine Optimization (SEO) and Search Engine Marketing (SEM) are Two different things altogether. The two things go hand in hand but are often thought of as one thing. Search Engine Optimization is what is done to your site to ensure that the end users have a friendly easy to use web site with SEF Menus and SEF URLS that Google, Yahoo, MSN and Ask.com crawl through and find your content. Search Engine Marketing is doing the advertising and marketing of your site. Ironical this is all done “offsite” whereas SEO is mostly done “onsite”.
http://thedudeoforkut.blogspot.com/2007/07/difference-between-seo-and-sem.html

“Many people misunderstand the goal of search engine optimization as distinct from search engine marketing. Applying SEM expectations to SEO can lead to significant frustration and disappointment.”
http://www.newfangled.com/difference_between_sem_and_seo

So What is this "Search Engine Marketing" Thing Anyway?

A definition of search engine marketing would be useful, the following from Wikipedia:

“Search engine marketing, or SEM, is a form of Internet marketing that seeks to promote websites by increasing their visibility in search engine result pages (SERPs). According to the Search Engine Marketing Professionals Organization, SEM methods include: search engine optimization (or SEO), paid placement, and paid inclusion.”

http://en.wikipedia.org/wiki/Search_engine_marketing