Gigi, you already had plenty of explanations of what a short sale is. Here is what it is NOT, quick.
A short sale is really a very long sale timewise if you get to the end. I say if, because in the back of it all some loans are self insured and whie I can't proof it there must be something in the insurance that triggers indemnification when forecause happens. I just can't make ryme or reason to the way banks are dealing with some files in a faling market.
Since they are not stupid, it has to be something else that makes them act dysfunctional like a third world outfit. Sometimes they picker for peanuts and won't approve the sale ony to discover that in a few months that same property sold for way less as a bank owned property.
Stil for some owners and loans, a short sale is a wonderful way out. It's a lot of work and your Realtor needs an ever expanding knowledge base as he/she tirelessly works on those short sale for half the money they woud earn in a normal sale.