Definition:

Satire - often strictly defined as a literary genre or form; although, in practice, it is also found in the graphic and performing arts.

Parody - a composition that imitates or misrepresents somebody's style, usually in a humorous way.

Difference:

"A satire is a piece of writing in which the subject is exposed to ridicule of some kind, usually in attempts to provoke or prevent a change. Satire can use any point of view.

A parody is a form of satire that mimics another piece of work in order to ridicule it. Parodies exist in all forms of media, including music and movies. A parody is generally written in a humerous manner, for the effect of comedy.

In many cases, satire and parody overlap, but a satire isn't always a parody. A satire doesn't have to be comedic (and is oftentimes quite the opposite), while a parody almost always has some bit of humor involved in its creation (even if that humor is only found by the author himself). Parodies imitate their subject, while imitation is not necessary in a satire.

A satire's main purpose is to be political, social, or moral and not humerous. A humerous satire tends to be so in subtle ways, usually utilizing deadpan or irony in large doses.

There are many uses of satire in television today. Shows like The Simpsons, Family Guy, and South Park have all used satire ranging from social to political commentary. One of the most popular artists who utilize parody is Weird Al Yankovich. He has written parody songs of artists ranging from Michael Jackson to Coolio to Madonna to Billy Ray Cyrus. Weird Al has poked fun of a multitude of people using a myriad of topics."

Reference: http://www.writing.com/main/view_item/item_id/1016378