A permanent magnet is one that retains its magnetic properties for a long period of time. A temporary magnet only maintains its magnetism while in the magnetic field produced by a permanent magnet or an electric current.
The materials from which permanent magnets are made are called hard magnetic materials, and typically consist of iron, nickel, cobalt and some rare earth alloys. Once magnetized, these materials tend to maintain their magnetism for long periods of time. The materials that form temporary magnets are known as soft magnetic materials, and consist of materials like annealed iron. The main difference between hard and soft magnetic materials is their coercivity, or the threshold an external magnetic or electric field would have to exceed in order to demagnetize the material. Hard magnetic materials have a much higher coercivity than soft magnetic materials.