Q:

What is the difference between "flight level" and "altitude"?

I have seen references to "FL180" and "FL300", and I know that they stand for Flight Level 180 and Flight Level 300. I've also seen references to "an altitude of 18000ft" or "an altitude of 30000ft".
What is the difference between flight level and altitude, how do they relate to each other, and when and why would one be used instead of the other?

A:

Flight levels use QNE or pressure altitude, while altitude references QNH or local pressure adjusted to sea level pressure.  Altitudes are used at low levels and flight levels at higher levels.  The transition between altitudes and flight levels differs by country and is generally just above the highest obstacle in that country.  In the US the transition altitude/level is 18,000' / FL180.  Some countries transition as low as 5000' / FL050 and the transition altitude/level may vary from airport to airport.  
In the altitudes knowing accurate elevations relative to the ground and obstacles is important for collision avoidance and this is the reason QNH is used here.  Each airport will report QNH and controllers will issue the current QNH as needed.  You need to know the QNH for obstacle / terrain avoidance but you need to be using the same QNH as those around you for aircraft vertical separation.
Above all terrain/obstacles the only thing we care about is vertical separation, so we no longer need to know about the actual pressure and instead use a standard reference pressure, QNE / 1013.25 hPa / 29.92" Hg.  
Note that flight levels drop the last two zeros of the corresponding altitude and so 30,000 is FL300, not FL30000.  When checking in with a controller, FL300 would be pronounced flight level tree zero zero. 
It is also worth noting that an altimeter cannot actually determine altitude.  It can only determine pressure (technically local static pressure compared to a reference pressure).  It converts this pressure to an altitude using a calibrated non-linear scale.  To illustrate the point, look at this map of 500 mb heights:

500 mb correlates to 5500 m or 18,000 ft in a standard atmosphere.  In a real atmosphere this height varies and is not actually level.  An airplane flying "level" at FL180 from LAX to NYC last night will have actually descended almost 300 m while indicating a constant altitude.  These deviations in true altitude from indicated altitude are acceptable, however, since they effect everyone equally in the same locality and separation is maintained.  

A:

FL180 and FL300 stand for Flight Level 180 and Fight Level 300. 
Flight levels are spaced 100ft apart on an altimeter that is set to the standard sea level pressure (QNE) of 1013.25 hectopascals or 29.92 inches of Mercury. So indeed, FL300 means 30,000 ft.
Altitude 18000 means that the altimeter indicates 18,000 feet and that the altimeter is set to the QNH, which is the pressure reading on the ground corrected to sea level pressure using the standard atmosphere. 
When there is a low pressure area, the QNH will be lower then 1013.25 hPa. When you compare two altimeters; the first set to QNH < 1013.25 hPa and the second one is set to the standard setting of 1013.25, the first altimeter will indicate a lower value than the second altimeter. 
QNH setting is used at lower altitude where obstacle and terrain clearance are important. But for long distance traffic it is a nuisance to change the altimeter setting as the aircraft flies through different pressure areas on the ground. Therefor the Flight Level concept was introduced, allowing everybody on higher altitude to use the same setting. This also reduces the chance that aircraft have a different altimeter setting in the same airspace, which would cause vertical separation problems. 

A:

Altitude
The vertical distance of an object measured from mean sea level.
Flight Level
To understand a flight level, we should understand how altitude is measured in an altimeter, which is essentially a calibrated barometer - it measures air pressure, which decreases with increasing altitude. To display correct altitude, a pilot re-calibrates1 the altimeter from time to time, according to local air pressure.
Flight levels solve this problem by defining altitudes based on a standard pressure of 1013.2 mb (29.92 inches Hg). All aircraft operating on flight levels calibrate to this same standard setting regardless of the actual sea level pressure. Flight levels are then assigned a number which is the apparent altitude ("pressure altitude") to the nearest thousand feet, divided by one hundred. Therefore an apparent altitude of 18,000 feet is referred to as Flight Level 180. Note that aircraft may be at some other actual height than 18,000 feet, but since they all agree on a standard pressure, no collision risk arises.
Flight levels are not used close to the ground, for perhaps obvious reasons - obstacles are fixed to the ground and so their absolute height needs to be known. The altitude of the lowest flight level varies from country.

1: Re-calibration of altimeter is done to avoid airplanes flying at the same height, though their altimeters show different altitudes. This is safety issue.

