Face (short for babyface) = The good guy. The typical win fairly guy. Cena is a face, Punk is now a face, Shawn Michaels & Triple H were both faces in their latest DX run. It's basically the typical good guy.
Heel = Comlpete opposite. Heel is the bad guy. The guy who will do anything to win. Miz, Ziggler, both recent examples of heels. Some older ones are HHH in 2000, Vince McMahon when he feuded with Stone Cold. Bad guys. Will often win by cheating. Don't mind beating you to a pulp. No remorse. Etc.