What do I need to know about the difference between these two designations in order to decide what to make one of my users so she can post?
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Author or Contributor
I hope this will help. You will find more discussion in the forum search box. Basically it's an issue of trust and one is ill advised to give anyone else more authority than they require. A co-administrator could boot you from the blog. http://faq.wordpress.com/2006/05/12/what-are-the-different-roles/
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The short answer is: An Author can publish articles without your permission or input ; a Contributor submits articles for you to edit and review and you push the Publish button when you want the article to appear.
Next question - how does a contributor make a post?
Same way you do. They just don't have the publish button. All they have is the Save button on teh Write Post page. You'll get a notice though that you have a draft from the user when you log in though.
OK I guess I need to back up a step. How do they get to that point to begin with (sign up, etc.)?
They have to register with wordpress and you have to add them to the blog.
Once you have added new users here -> Your Dashboard -> Users -> then contributors/authors/editors/administrators register an account with WP.com, and they can post just as drmike described to you. This is detailed in the FAQs blog here http://faq.wordpress.com/2006/05/17/how-do-i-add-more-authors-users-to-my-blog/
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