There are 2 basic types of Hardwood Flooring - Solid and Engineered.
Solid Hardwood Flooring is just what it sounds like - A solid piece of wood, usually 1/2" to 3/4" thick. A tree is cut down and then cut into planks. These planks are sanded and the edges are finished with a tongue and groove locking mechanism. They are inspected and graded. Knots, color variations and worm holes all affect the grading of the wood. The less imperfections, the higher the grade. The wood planks are then cut to random lengths and finished.
Due to the fact the Solid Hardood is a natural product, it is affected by moisture. During periods of high humidity, the individual planks will swell and expand; If no expansion room was left during installation, the boards will cup and buckle. It is important to note, that due to the moisture factor, Solid Hardwood Flooring can not be installed below grade or over a concrete slab.
Engineered Wood Flooring is relatively new to the flooring world. Rather than cutting the tree into planks, the tree is laid on its side and rotary cut around the tree. This results in a thin wood veneer. These wood veneer layers are then glued to a cross-ply constructed core. This construction method allows Engineered Wood Flooring to be installed in areas with a higher moisture content and below grade, because it is now moisture resistant.