3D rendering is the 3D computer graphics process of automatically converting 3D digital models into 2D images with 3D photorealistic effects or non-photorealistic rendering on a computer.

Rendering is the final process of creating the actual 2D image or animation from the prepared scene. Several different, and often specialized, rendering methods have been developed. These range from the distinctly non-realistic wireframe rendering through polygon-based rendering, to more advanced techniques such as: scanline rendering, ray tracing, or radiosity. Rendering may take from fractions of a second to days for a single image/frame. In general, different methods are better suited for either photo-realistic rendering, or real-time rendering.

Real-time:

Rendering for interactive media, such as games and simulations, is calculated and displayed in real time, at rates of approximately 20 to 120 frames per second. In real-time rendering, the goal is to show as much information as possible as the eye can process in a fraction of a second (a.k.a. in one frame. In the case of 30 frame-per-second animation a frame encompasses one 30th of a second). The primary goal is to achieve an as high as possible degree of photorealism at an acceptable minimum rendering speed (usually 24 frames per second, as that is the minimum the human eye needs to see to successfully create the illusion of movement). Rendering software may simulate such visual effects as lens flares, depth of field or motion blur. These are attempts to simulate visual phenomena resulting from the optical characteristics of cameras and of the human eye. These effects can lend an element of realism to a scene, even if the effect is merely a simulated artifact of a camera. This is the basic method employed in games, interactive worlds and VRML. The rapid increase in computer processing power has allowed a progressively higher degree of realism even for real-time rendering, including techniques such as HDR rendering. Real-time rendering is often polygonal and aided by the computer's GPU.

Non real-time:

Animations for non-interactive media, such as feature films and video, are rendered much more slowly. Non-real time rendering enables the leveraging of limited processing power in order to obtain higher image quality. Rendering times for individual frames may vary from a few seconds to several days for complex scenes. These frames are then displayed sequentially at high frame rates, typically 24, 25, or 30 frames per second, to achieve the illusion of movement. When the goal is photo-realism, techniques such as ray tracing or radiosity are employed. This is the basic method employed in digital media and artistic works. Techniques have been developed for the purpose of simulating other naturally-occurring effects, such as the interaction of light with various forms of matter. Examples of such techniques include particle systems (which can simulate rain, smoke, or fire), volumetric sampling (to simulate fog, dust and other spatial atmospheric effects), caustics (to simulate light focusing by uneven light-refracting surfaces, such as the light ripples seen on the bottom of a swimming pool), and subsurface scattering (to simulate light reflecting inside the volumes of solid objects such as human skin).The rendering process is computationally expensive, given the complex variety of physical processes being simulated. Computer processing power has increased rapidly over the years, allowing for a progressively higher degree of realistic rendering. Film studios that produce computer-generated animations typically make use of a render farm to generate images in a timely manner. However, falling hardware costs mean that it is entirely possible to create small amounts of 3D animation on a home computer system. The output of the renderer is often used as only one small part of a completed motion-picture scene. Many layers of material may be rendered separately and integrated into the final shot using compositing software.

Paraphrased from Wikipedia: http://en.wikipedia.org/wiki/3D_rendering