What is White Hat, Black Hat, Gray Hat SEO ?

While their are some people that do not know about this , for a few years their have been labeled a few different lables for people who are trying to perfect search engine optimization, the different types of SEO are told apart by calling them different color HATS! Like myself many of the people out their are practing White Hat SEO . While some SEO consultants are turning into BLACK HAT (SPAMMERS). Their is also a third type of hat for the people who are not full blown spamming and still following many of the White Hat SEO rules, and these webmasters are called Gray Hats!
What many people wonder, is what do these lables help? Also what do the terms Black Hat and White Hat, as well as GRAY Hat SEO even mean in the first place? Like I have said the methods I use to improve the SEO of my sites would put me inside a WHITE Hat. Does these even mean I am better then the Black Hat, or are they better then me, and is what they are doing alright? It is good that my webpage should not be able to get banned, due to the fact I use WHITE Hat SEO , but people using the BLACK Hat SEO know that their webpage will get banned sooner or later, and they just put that inside their buisness plan…..This really brings up the question who is a better SEO player…A WHITE Hat , a BLACK Hat , or just someone in the middle a GRAY Hat…Anyone got an opinon on this?

It might make me better at not getting a site banned from the search engines, but then again, most Black Hats know that their sites will eventually get banned and have figured that into their business model. So it’s not really a question of good or bad, like the hats seem to imply.