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"Stop" is the AWS EC2 verb for shutting down a box, but leaving the configuration and storage alone. You do it for load balancing, or when you're done testing or developing something for the day but you'll need to go back to it tomorrow. To undo a Stop, you just do a Start, and it's just like power cycling a computer.
"Terminate" is the AWS EC2 verb for shutting down a box, deleting the configuration and (usually) deleting the storage as well. It's the "nuke it from orbit" option. You do it for temporary instances or instances with sensitive information that needs to go away. To undo a Terminate, you weep profusely and then manually rebuild everything; or, if you're very, very lucky, you restore from backups (or an AMI).