The purpose of machine learning is to find (and exploit) patterns in data. Traditionally developers, when faced with a problem, develop and algorithm and write code. Certain classes of problems, however, do not lend themselves to this approach. With machine learning, the developer instead supplies relevant data to the machine and allows the computer to create the appropriate algorithm.
Supervised learning is the branch of machine learning that deals primarily with prediction. Given examples, supervised learning algorithms create models that generalize the decision making process. In essence, the machine learns from the past in order to accurately predict the future.
Unsupervised learning is the branch of machine learning that strives to understand the structure of data. This data, unlike supervised learning, does not have a predefined outcome that requires prediction but is vast enough to require a principled approach to either visual or physical compression.