To fully understand what a pardon does, first consider that when a person is convicted of a felony, he loses his civil liberties -- the right to vote, serve on a jury, own a firearm. Living without certain rights is referred to as civil disability.
What a pardon does is restore these rights. Customarily, an individual's civil abilities are restored through a pardon after the person has served his prison sentence or paid his fine, but not always. (President Nixon was pardoned by President Ford before charges were even filed against him.)
Clemency is the term for the action taken by the president in a pardon. It can be any action of mercy granted to an individual convicted of a crime that has some affect on the conviction or sentence. Acts of clemency include the president's power to pardon, commute and give respite and remission.
Each of these forms of clemency has its own affect on the legal status of an individual who has been granted clemency. Commutation, for example, shortens or abolishes the sentence. Yet it leaves intact the civil disability attached to the individual's status as a citizen. Commutation is considered fairly rare by the Department of Justice, and has not been frequently used by presidents in the past [Source: U.S. Department of Justice].
A full pardon places the legal and civil status of the convicted back to where it was before the crime was committed -- it's as if the crime never took place, as far as the law is concerned. A case in the 1990s (U.S. v. Noonan), did establish that the records of the conviction still remain, though. The full pardon gives the president the ability to release an individual from prison, as does a commutation.
There is also the conditional pardon. Under this circumstance, a president may issue a pardon in exchange for something in return. In 1902, President Theodore Roosevelt issued a blanket pardon to all who had taken part in the insurrection in the Philippines, then an American territory. However, those receiving the pardon were required to swear an oath "accept the supreme authority of the United States of America in the Philippine Islands [Source: Shanor and Miller]." President Richard Nixon gave Teamsters racketeer Jimmy Hoffa a conditional pardon in exchange for Hoffa's pledge to never again take part in labor organization [Source: Time].
Remission is the act releasing a person from a legal obligation. An example of this is to release a person from a fine he was sentenced to pay. This applies only to fines levied against an individual as the result of a federal case.
The final act of clemency the president is allowed under the pardon power is the respite. This is a short-term action -- lasting only a month or two -- and allows the president to put off a sentence. It's not a legal reflection on an individual's guilt or innocence (like the pardon) and it doesn't interfere with a trial. Instead, the respite can keep the individual from going to prison or keep him from being executed. Usually, the purpose of a respite is to buy time to allow further consideration of a pardon petition. Respites can also be issued in succession as they expire.
Now that you know what tremendous power the pardon and other forms of clemency have, read on to learn about the limitations of pardons.