Questions pertaining to creating materials for Blender Internal and Cycles. Materials are used to define the way an object will interact with light for rendering.
Materials are used to define the way an object looks when rendered, and how the render engine will calculate the way light interacts with an object.
Blender Internal (BI)
Z Transparency and Raytraced refraction
Subsurface Scattering (SSS)
There are two ways to create materials for BI, with the Materials Panel in the Properties Editor, or with the Material Nodes system.
Diffuse BSDF (Bidirectional Scattering Distribution Function)
Subsurface Scattering BSSRDF
Cycles uses a more node based material system than BI, for example unlike BI materials, while you can edit Cycles materials in the Properties Editor > Materials Panel, doing so will actually create the proper nodes for your material (Where in BI material nodes are disabled by default)