I always thought this was a regional difference in words, like "pop" and "soda," but this isn't so. "Stuffing" is what you put inside the bird and cook with the bird, so it absorbs the drippings. "Dressing" is what you cook on the side in a casserole dish. Proponents of stuffing say cooking it inside the bird makes it moister and richer in flavor. Those who favor dressing argue that when stuffing is put inside the bird, it doesn't reach high enough temperatures to kill the bacteria it came in contact with while the bird is raw and poses a health risk. Dressing is usually crisper than stuffing, but some people add a stick of butter and some beaten eggs to it to add some moisture.
However, some people call it "dressing" even if it's cooked inside the bird. This is more common below the Mason-Dixon line.
(Image: The Maid Stuffing a Turkey, $14.99 for a 16x16 print on Art.com)