This is what I think I know about bullets from reading and listening to others - please correct me if I'm wrong about anything. I want to be able to talk intelligently about this subject if someone asks me about this stuff!
What I think I know:
Caliber refers to the diameter of the bullet in fractions of an inch. This leads to some confusion when talking about cartridges named in metric terms, so while you could say a gun's caliber is nine millimeter you couldn't say it was a nine caliber.
Ammunition can be of the same caliber but have different characteristics - a round of .45-70 and a .45 ACP have the same diameter, but very different properties. To avoid confusion it is better to refer to the name of the specific cartridge.
A round of ammunition is composed of the case, bullet, primer and the gunpowder/propellent. The bullet is the metal slug that comes out of the barrel and hits the target. Bullets haven't changed much since WWI; they're just pointed pieces of metal.
Bullets basically have 2 major parts, a jacket and a core. The core is usually made of lead, the jacket of copper. The purpose of the jacket is to prevent the core from deforming upon firing, and to prevent the barrel from being fouled by stripped material from the core. (Question: why don't they just make the whole bullet one solid slug of copper?)
Most bullets are variations on 3 types: hollow points, soft points and full metal jacket bullets. Hollow points and soft points are made to deform when they hit a target so that they do more damage by destroying more tissue. A soft point bullet has the core exposed at the nose. Hollow points can be jacketed or have the core exposed. In contrast full metal jacket bullets tend to penetrate.
There is also a "boat tailed hollow point" - a kind of bullet that has a very small hollow point that stabilizes the bullet in flight, but does not alter the way a bullet interacts w/the target.
A "frangible" bullet is like the ultimate soft point, it is supposed to break up on impact and is banned for use in war by the Hague conventions.
An armor piercing bullet has a core of steel or other hard metal. They are restricted from civilian use in the US.
Coatings like teflon and molyobleum(spelling?) only serve to protect the barrel and provide no penetrative ability.
Bigger, slower bullets are good at doing a lot of damage, but poor at penetrating armor or intervening media. There is some controversy over whether small, fast bullets destroy tissue in other ways like "hydrostatic shock" or something.
Rifle bullets are faster than handgun bullets. Rifle ammunition will generally penetrate better than handgun ammunition. The exception to this is certain media, like dirt, where the high speed of the rifle round destroys the bullet before it gets very far.
The 5.56mm and .223 are very similar but not identical, though many people refer to them as the same thing. The 5.56mm does not "tumble" when it hits a target to cause more damage, this is a myth.
There is no such thing as a mercury bullet or a poisoned bullet.
Am I on the ball or am I full of crap? Please let me know...