Epidemic and Pandemic.
Pandemic is when an illness (in this case the swine flu) crosses populations (usually nations although the World Health Organization requires continents/geographic regions). A pandemic can in fact exist with lower than average incident rates (the swine flu is no where near achieving a flu season population infection right now and at the rate it is going won't unless it is still around in 6 months.) Pandemic represent only the potential for greater infection statistically as they are averaged across populations on a global scale. You cannot have a pandemic in a single country.
An Epidemic is when an illness substantially exceeds average incident rates within a population. This is what you have to worry about because it means that a bunch of people are "actually sick", not "might get sick". The 1918, 50s and 60s flu pandemics were in fact "epidemics" and "pandemics" because the rate of actual sick was higher than normal (over twice the average instance of "seasonal flu") and a bunch of countries were sick.
New rule-to be a journalist or politician you must achieve a B grade or higher on the SAT language definition section.
Trivia-this last cold season many of you may have caught the creeping crud (a very nasty form of bacterial infection that followed closely on the heels of the cold.) This was an epidemic because it affected huge chunks of the US and Canada population. (School closures were reported in many areas.) However the infection did not travel well and it did not leave North America so it never became a pandemic.
I hope this helps fight some of the panic and misdirection being sown out there.