Emulsion is the mixture oftwo or more liquids thatdo not naturally mix together. A classic example of emulsion in cooking the mixtureoil and vinegarto make a simple vinaigrette.
There are two types of emulsion, temporary and permanent. Asimple vinaigrette, the combination ofoil and vinegar, is an example of a temporary emulsionbecause the two liquids only briefly stay togetherbefore re-separating. On the other had, mayonnaise, the combination of oil, egg yolks, and lemon juice or vinegaris an example of a permanent emulsion. Normally, these ingredientsdo not mix together, butonce they have been slowly whisked together, the substanceswillnot separate.
References:
http://culinaryarts.about.com/od/glossary/g/Emulsion.htm
http://www.finecooking.com/item/37034/how-to-make-and-fix-emulsion-sauces