I ams till fairly clueless, so pros correct me 
where I am wrong. All of this was basically 
said below, but I know what it is like to want a 
dictionary-style answer to make it perfectly 
clear.

Cels are created (I believe this is covered in 
the Animanga FAQ) by two step process 
where first all the objects are drawn on the cell 
with some sort of black pen, and then the 
drawn shapes are painted in with the 
appropriate colors. The pen ink used to draw 
the black line outlines is far less resiliant than 
the coloring ink used to paint the cell, and is 
subject to fading away over time, particularly 
when the cell (as descirbed in the other posts) 
is exposed to constant light.  This process is 
what is referred to by "line fading" The result is 
cell that looks odd and in bad cases (i've seen 
one or two brutal scans, far worse than the 
below) maks the cell look horrible since 
(whether you conciously notice it or not) it is 
the black lines that give the objects (people 
and things) on the cell their primary shape. As 
I think Drac suggested, if you look at the back 
of a cell you can get an idea for what it looks 
like in bad cases.