Text layers in Photoshop are by default vector layers. This means they can be scaled up or down without any loss in quality. Rasterising the text gets rid of the vector information (the mathematical shape of the text) and turns it into pixels. At this stage, the text is fixed and can't be easily manipulated without some loss of quality.
Rendering text, on the other hand, is just the process of drawing the text (whether vector or pixel based) on screen for you to see what you're doing.
blueark is correct, however are you referring to the different terms used in PS-6 & 7 vs PS-5. In PS-5 you used to right click on the text layer and it said RENDER TEXT. Now in PS-6 & 7 it says RASTERIZE TEXT, both of those commands do the same thing.
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