What is difference between Unchecked and Checked Exceptions?

Unchecked exceptions :

• represent defects in the program (bugs) - often invalid arguments passed to a non-private method. To quote from The Java Programming Language, by Gosling, Arnold, and Holmes : "Unchecked runtime exceptions represent conditions that, generally speaking, reflect errors in your program's logic and cannot be reasonably recovered from at run time."
• are subclasses of RuntimeException, and are usually implemented using IllegalArgumentException, NullPointerException, or IllegalStateException
• a method is not obliged to establish a policy for the unchecked exceptions thrown by its implementation (and they almost always do not do so)

Checked exceptions :

• represent invalid conditions in areas outside the immediate control of the program (invalid user input, database problems, network outages, absent files)
• are subclasses of Exception
• a method is obliged to establish a policy for all checked exceptions thrown by its implementation (either pass the checked exception further up the stack, or handle it somehow)