Excerpts taken from http://en.wikipedia.org/wiki/Halal
Halal is an Arabic term meaning "permissable". In the English language it most frequently refers to food that is permissable according to Islamic law. In the Arabic language it refers to anything that is permissable under Islam.
...in contrast to haraam, that which is forbidden. This includes behavior, speech, dress, conduct, manner and dietary laws.
In non-Arabic speaking countries, the term is most commonly used in the narrower context of just Muslim dietary laws, especially where meat and poultry are concerned, though it can be used for the more general meaning, as well.
.....similar to the Jewish term "kosher"
Muslims vary on what is required for food to be considered "halal".
Dhabiha Halal
Adherents to this philosophy maintain that in order for food to be considered halal, it must not be a forbidden substance and any meat must have been slaughtered according to the traditional guidelines set forth by the Sunnah, known as dhabiha. This is the strictest definition of halal.
Bismillah Halal
Some believe that the guidelines of dhabiha do not necessarily need to be followed and reciting "Bismillah al Rahman Al Rahim" (In the name of God the Beneficent and Merciful) immediately proceeding consumption renders the meat permissable. People who adhere to this type of halal generally do not partake in the consumption of forbidden substances.
Second type of "Bismillah" Halal
Adherents to this type of "Bismillah Halal" generally believe that any food, whether or not it is a forbidden substance, becomes halal once "Bismillah al Rahman Al Rahim" (In the name of God the Beneficent the Merciful) is recited over the food. Generally, this phrase is recited immediately prior to consumption.
Halal and Kosher
Some believe that the terms halal and kosher are interchangeable. Although they bear significant resemblance, most Muslim authorities believe they are not interchangeable.
Non-Pork Halal
Some believe as long as a substance is not pork, it can be considered halal.
Explicitly forbidden substances
A variety of substances are considered haraam (forbidden) as per various Quranic verses:
Pork, or any pig based products
Blood
Animals slaughtered in the name of anyone but Allah
Carrion
Fanged beast of prey, as per the Sunnah, usually simplified to all carnivorous animals with the exception of most fish and sea animals
All intoxicants (specifically alcohol)
There is some disagreement among Muslims regarding seafood, especially predatory sea creatures. IFANCA (Islamic Food and Nutrition Council of America) states this regarding the opinion of Islamic scholars:
All are in agreement that fish with scales are halal
Most agree that frogs are haraam
Some believe that fish found dead are haraam
Some believe that only those sea creatures resembling halal land creatures are halal
Dhabiha (method used to slaughter animals)
The conventional method of slaughtering all animals excluding fish and most sea life is known as dhabiha, often pronounced by non-Arabs as 'zabiha'. It involves severing the major arteries in the neck of the animal, as well as the esophagus and trachea with one swipe of a nonserrated blade.
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