Adult stem cells are multipotent, semi-differentiated, cells that exist in all tissues. "Adult stem cell", however, is not the preferred term used in the field to refer to them—developmental biologists will usually refer to them as "tissue resident stem cells" or as a specific cell type (often referencing the genes they express). They function to maintain tissue homeostasis by dividing to replace damaged or senescent somatic cells. The two most well-studied examples of adult stem cells are the hematopoietic stem cells, which give rise to blood cells, and the intestinal crypt stem cells, which give rise to the intestinal epithelium.
As multipotent cells, most adult stem cell types can generate cells of several different types. However, because they are already epigenetically programmed to favor a particular fate, they generally cannot generate cell types outside of their lineage without genetic manipulation.
Identifying and characterizing stem cells within all adult tissues is an area of much intense ongoing research. Understanding the mechanisms underlying the regulation of these stem cells has led to many recent breakthroughs in the field of cancer biology. A recent paradigm-shift in cancer biology was the discovery that cancer is a disease resulting from dysregulation of adult stem cells. The clinical implications of this concept are still being explored. Obviously, there is still much in this field that remains unknown.
Functionally, adult stem cells are very different from embryonic stem cells. Whereas embryonic stem cells are omnipotent, and may be coaxed with growth factors into producing any known cell type, adult stem cells are already partially committed to a particular fate and, without genetic manipulation, will only generate a limited number of cell types. As stated above, this is currently an intensive area of research, but at the present the two are not practically equivalent.
Induced pluripotent stem cells are fully differentiated somatic cells that have been manipulated, either genetically or with growth factors (often a combination of the two), to become pluripotent stem cells. These cells still retain some epigenetic imprinting of their original type—even with the most current techniques. Mouse models have demonstrated that these cells have a significantly higher tumorigenic potential than transplanted embryonic stem cells. As such, therapies involving induced pluripotent stem cells are primarily being studied only as options of last resort. As scientists in the field devise better ways to generate these cells (new techniques are a current area of much research—there have been at least 40 published since 2009), they may become more clinically useful. Until that happens, induced pluripotent cells cannot substitute for adult or embryonic stem cells in clinical medicine or research.