Coming from an ASP.NET background, theming meant the ability to customize the look and feel of a site.  Skinning is the process of applying a particular "skin", a collection of styles including changes to layout to the site.  However, this is not the case in WPF.

In WPF, a theming and skinning takes on slight variations to their meanings.  Theming refers to controlling the look and consistency of an application UI to match the operating system.  For example, a WPF application can be themed for the Windows Aero theme or the Windows Classic Theme.  Skinning refers to changing the application's appearance.  In other words, applying or letting the user pick a skin to change the look and feel of the application.

Robby Ingrebertsen, while working on the WPF team, simplifies it as follows:

Around here, we generally say that "theming" refers to the system theme and "skinning" refers to changes to a specific app. This has helped to clarify our internal communication.

This distinction is important as we are working on expanding Family.Show to support skinning.  Look for more to come.