Both the SAT and ACT are nationally recognized college entrance exams. Nearly every college you apply to - community college or otherwise - require a certain grade for at least one of these tests prior to admission. Both tests do part of the colleges' work for them. Since high schools and other colleges have different ways of handling units, testing, etc., the SAT and ACT provide common ground for admissions officers to determine your admission to a college or university.
SAT
The SAT used to stand for Scholastic Aptitude Test, but now (due to political correctness) the acronym remains without any meaning behind it. About.com states that the test itself takes three hours and measures both verbal and mathematical reasoning skills. The verbal section includes vocabulary, analogies, sentence completion, and reading comprehension. The mathematics section includes arithmetic, algebra, geometry, and other reasoning questions.
When you take the test, you are competing with everyone else in the country. For example, the points you are awarded are dependent upon how you answer the multiple-choice questions in both the mathematical and the verbal sections in comparison to other students who took the same exam. The scores on the SAT range from a 200 (lowest possible) to 800 (highest possible) with an average score being 500. Naturally, the higher you score on the exam, the more favorable you look to potential colleges.
ACT
The American College Test (ACT), as about.com states, measures a students understanding of English, math, reading, and science. Instead of measuring a student's aptitude (how well they can be expected to do) like the SAT, the ACT measures what a student has already learned. There are a total of 214 questions on the ACT along with an optional writing portion. You are encouraged to take the writing portion of the ACT. If you choose to skip the writing section of the ACT, you will have four hours and fifteen minutes to complete the exam (including two separate breaks). However, if you intend to take the writing portion of the ACT, you will be in the testing area another hour. You are graded for each section of the ACT. Furthermore, you get a composite score based on the number of correct answers. About.com states that the highest score is a 36, and (unlike the SAT) there is no penalty for guessing incorrectly.