Basically what a bisexual person calls themselves in order to sound like the greatest, most super-tolerant person ever. A bisexual individual is perfectly capable of being attracted to whomever they wish, but a bisexual who calls themselves pansexual believes that it takes one more step and yet another meaningless derivative with which they can slap judgment upon anyone who doesn't understand the difference.
It does NOT actually mean what the etymology implies ("pan" means "all" or "everything"), because if it did, then pansexuality would include bestiality, pedophilia, necrophila, and every other -iality and -philia known and unknown to humanity.
Mary: "*tsk* No, I'm PANsexual. I love ALL kinds of people, no matter what their gender preference."
Bob: "...but I thought gender preference had nothing to do with which gender you are..."
Mary: "YOU BIGOT!! TOLERATE ME, DAMMIT!!!"
People or persons who are sexually attracted to pots and pans; usually associated with cooking.
Some Other Faggot:"What the fuck is it with you and cooking eggs?"
Pansexual Peter: "I'm sorry mang, I can't help it. I 'jes love me the look of some o' those Frying pans y'all niggas have."
Some Other Faggot: "What the fuck dude?"
Pansexual: anything, maybe even you.
Friend: excuse me?
Pansexual: wanna have a threesome with my dog?
Sexuality is determined by four things: the person's chromosomes, internal sex organs, external sex organs, and psyche. Bisexuality covers all of the area here seeing as sexuality is on a continuum and not simply classified as a binary stagnant thing. Some may argue hermaphrodites, pseudo-hermaphrodites, and other IS people don't fit into one gender group. However, they consist of male and female sexual organs and also combinations of X and Y chromosomes. Regarding people that are transgendered, they are biologically of one sex regardless of how they manipulate their body through procedures or hormones.
Furthermore, it should be noted the difference between omnisexuality and pansexuality. Omnisexuality's definition includes people that are bisexual and have pedophilia, necrophilia, zoophilia, etc. Further clarification of these words can be found in the easy to read "Sexologies" journal from the European Federation of Sexology.