What is the difference between absolute and relative URLs?

The big difference is that absolute URLs will always include the domain name of the website with http://www. Relative links show the pat to the file or refer to the file itself, which is useful because it can transfer a user from point to point within the same domain.

In the following episode of AskGoogleBot, John Muller talks about this difference, and goes into if there is a preference in how a search engine crawls and indexes them.