What is a pull up and pull down?

It's the other way around.

Pull up is where you place a resistor between a signal and +V, pull down is pulling it to ground.

(from http://roguescience.org/wordpress/?page_id=11)

Here, you can see that when the switch is open, in the pullup scenario the input pin will read high, but for pull down it will read low.

The basic function of a pull-up or pull-down resistor is to insure that given no other input, a circuit assumes a default value. But one pulls the line high, the other pulls it low.

Good source to learn: http://www.seattlerobotics.org/encoder/199703/basics.html

Lots of valid points here, examples of what pull-ups are, and certainly you can work out which way is up from them, but I'm going to aim this at the 'explain the terminology' aspect..

The mnemonic that makes sense (to me anyway) is that the resistor is used to 'pull' the pin to some established voltage; so usually one speaks of pulling 'up' toward the positive supply voltage, or pulling 'down' toward ground or a negative supply voltage.