In plain english, it is one person harming the reputation of a second person by TELLING a lie about the second person. It is distinguished from WRITING a lie, which is libel. Both libel and slander are often collectively referred to as "defamation."
Here is the definition from Law.com's legal dictionary:
"Oral defamation, in which someone tells one or more persons an untruth about another, which untruth will harm the reputation of the person defamed. Slander is a civil wrong (tort) and can be the basis for a lawsuit. Damages (payoff for worth) for slander may be limited to actual (special) damages unless there is malicious intent, since such damages are usually difficult to specify and harder to prove. Some statements, such as an untrue accusation of having committed a crime, having a loathsome disease or being unable to perform one's occupation, are treated as slander per se since the harm and malice are obvious and therefore usually result in general and even punitive damage recovery by the person harmed. Words spoken over the air on television or radio are treated as libel (written defamation) and not slander on the theory that broadcasting reaches a large audience as much as if not more than printed publications."
A roundup of the best tips and legal advice.