From
http://en.wikipedia.org/wiki/Leather
Full-grain leather refers to hides that have not been sanded, buffed, or snuffed (as opposed to top-grain or corrected leather) to remove imperfections (or natural marks) on the surface of the hide. The grain remains allowing the fiber strength and durability. The grain also has breathability, resulting in less moisture from prolonged contact. Rather than wearing out, it will develop apatina over time. High quality leather furniture and footwear are often made from full-grain leather. Full-grain leathers are typically available in two finish types: aniline and semi-aniline.
Top-grain leather (the most common type used in high-end leather products) is the second-highest quality. It has had the "split" layer separated away, making it thinner and more pliable than full-grain. Its surface has been sanded and a finish coat added to the surface which results in a colder, plastic feel with less breathability, and it will not develop a natural patina. It is typically less expensive and has greater resistance to stains than full-grain leather, so long as the finish remains unbroken.