Traditional home comfort systems are called a split system because they have components inside and outside.
An air conditioner is an electric powered outdoor unit responsible for cooling refrigerant (R-410A) and sending it to the evaporator coil (or air handler) inside. This cooled refrigerant fills pipes in the evaporator coil, and the furnace fan blows indoor air across these pipes to extract heat (also dehumidifying).
Air conditioning and cooling efficiency is measured using a Seasonal Energy Efficiency Ratio (SEER). A higher SEER rating means lower utility bills. Manufacturers are continually improving the efficiency of units without sacrificing performance. From twin cylinder technology to variable speen fans to UV lamps for evaporator coil efficiency.
HVAC Advice: Be sure to purchase an air conditioner that uses modern R-410A refrigerant as opposed to R-22 as it is being phased out. Also, when installing a new system, have your AC contractor examine your evaporator coil to ensure the coil is clean and ready to perform efficiently. You don't want to pay for a high SEER rating on your A/C unit only to have your coil affect cooling efficiency.
HVAC Tip: If your AC contractor ever says "condensing unit", they are referring to your air conditioner.