To put an OEM product in the simplest terms, it is a product from a manufacturer that is sold without the retail packaging to system integrators and retailers for purchase in or with a completed computer system. Often they are sold in larger lots or groups to help reduce the costs to the company using the parts for integration. What the OEM product will come with will vary depending upon the type of product being sold.
So, how does the product vary? Typically the component that is purchased as an OEM product lacks all retail packaging.
Also missing might be cables or software that may have been included with the retail version. Finally, there may be no or reduced instructions included with the OEM version of the product.
A good example of these differences can be seen between an OEM and retail hard drive. The retail version is often referred to as a kit because it includes with it the drive cables, installation instructions, warranty cards and any software packages used to help configure or run the drive. The OEM version of the drive will only include the hard drive in a sealed anti-static bag with no other materials. Sometimes this will be referred to as a 'bare drive'.
When your trying to find the difference between a knockoff and a real OEM product you generally want to look for a Warranty. OEM products still have a warranty even if its not as good as a Retil Warranty. Most knockoffs wont have a Warranty card with the product.