Generally it's things that have been prepared
such that there's some sort of added preservative -- salt, sulfates, sulfides, nitrates, etc.
So this would include all hams except 'fresh ham', almost all deli meats, all sausages, bacon, jerky, corned beef, etc.
So yes, sausage is considered a processed meat.
If you want to get all technical about what 'processed' means it could also include any other form of curing (eg, smoking), and most any form of processing (grinding, slicing, etc), although this second group typically isn't refered to as 'processed meat' (unless it's then glued back together, like chicken nuggets, but those tend to have additives in them already)
As for the health aspects ...
like most anything, it's fine in moderation, although there are some people who react badly to sulfates and sulfides.
Some sausages have more additives in them than others, and there are plenty of sausages out there that might be considered 'healthy' if it's in place of other higher salt/fat foods (eg, some brands of chicken & apple sausage).
cooking.stackexchange.com/users/67/Joe
Generally such health fears will be to do with the amount of additives in "processed meat".
The use of Mechanically Reclaimed Meat (MRM) is also rather frowned upon.
At the height of the media coverage of such issues in the UK, Turkey Twizzlers were singled out for particular hatred, the ingredients list almost speaks for itself.
(Via: http://www.guardian.co.uk/media/2005/mar/23/broadcasting1 ) Ingredients: Turkey ( 34% ), Water, Pork fat , Rusk, Coating (sugar, rusk, tomato powder, wheat starch, dextrose, salt, wheat flour, potassium chloride, hydrogenated vegetable oil, citric acid, spices, onion powder, malt extract, smoke flavourings, garlic powder, colour [E160c], mustard flour, permitted sweetener [E951], herb, spice extracts, herb extracts), Vegetable oil, Turkey skin , Salt, Wheat flour, Dextrose, Stabiliser
(E450), Mustard, Yeast extract, Antioxidants
(E304, E307, E330, E300),
Herb extract, Spice extract, Colour (E162).
Note the percentage Turkey in that list, and that is MRM.
Turkey skin is added separately in to the mix as well you will notice, as well as pork fat.
Sausages can fall in to this trap, many cheap sausages are around 30-40% meat and contain a great deal of additives.
There are however many good quality sausages that contain few, if any, additives.
Some people advocate that sausages should be close to 100% meat, personally I think they are better with a good bit of rusk and other ingredients.
It is the word processed that is key to the argument.
Sausages are necessarily "processed" meat, in that the meat is not in its original form.
But the health issues are for when "processed" means a lot of unhealthy additions, poor quality meat, a great deal of fat, salt, etc.
cooking.stackexchange.com/users/3432/Orbling
good quality sausages don't contain sodium nitrite.
you can tell, because it looks like ground up meat in a sausage stuffing.
the "processed" meats you're referring to have a different texture & color - think hot dog or deli-meat (pink).
mechanically process is very different from chemically processed.
nutritionally, you want to steer clear of the chemically processed (preservatives & sodium nitrite).
cooking.stackexchange.com/users/4179/Chef
I get my sausages from a great butcher, and I'm certain that all the "processing" done to them is benign.
"
Processing" in this case entails mincing, mixing with breadcrumbs, spices etc.
and putting in the skins.
They will be high in fat -- because it's pork and it won't be from the leanest part of the pig, and because the fat makes for moist delicious sausages.
Of course you can make sausages with as many filthy additives as you like, and if you go far enough downmarket
that's what you'll get.
But the same could be said for, say, lasagne.
A homemade lasagna is quite different from the cheapest lasagna ready-meal in the freezer section of your supermarket.
cooking.stackexchange.com/users/4214/slim
Generally they put those chemicals in the meat to enhance the flavour (salt / sodium) and so it stays on the self longer - nitrates (prevent bacteria from growing)
Long as you look at the packaging and look for high levels of meat 70 - 80% they will need put less salt in for flavour.
but they will always need put the preservatives or it wont keep for very long and producers lose money.. and you get annoyed if it doesn't keep in the fridge.
My tip is for a decent sausage is to visit the local butcher..
he'll tell you what's in it or more importantly
what's not in it.
Plus you'll get a better service and the meat is better quality and there sausages are always always much nicer.
cooking.stackexchange.com/users/940/Hath
Over the years, I've read a lot of health information that says processed meats are some of the worst foods for you from a fat, sodium, and nitrate intake perspective.  Then I read that Sausage is a processed meat, which, makes sense.  Is all Sausage considered a "Processed Meat", and is therefore relatively high in fat, sodium, and nitrates?
Is all sausage considered a "Processed Meat"?
cooking.stackexchange.com
<meat><fats><sausages><charcuterie><sodium>
cooking.stackexchange.com/questions/10860
cooking.stackexchange.com/users/3673/Mark Rogers
Sausages are not in their original form and are necessarily processed, but higher quality sausages will have fewer additives such as sodium nitrate. There are also some sausages that are healthier than others, such as some brands of chicken and apple sausage. Sausage is a processed meat. Some sausages contain a lot of additives, while others contain hardly anay.
Sausage is considered a processed meat. Some sausages contain more additives than others. They are ok in small amounts and are intended to enhance the flavour and preserve them for longer.