Vision is considered to be the starting point for strategy. This is not to say that companies or organization began by sitting around a table and thought up a vision statement for their company. This is because it already existed; there was a vision in place after the business or organization was in operation for a period of time. This task that results is to identify the vision. 

Mission is what the company does now. It typically describes the customers, markets, products or services, and how it does it. It may include a comment about the employees and how they are managed. Obviously making a profit is the objective of every company but it may be worded vaguely as maximizing shareholder value or something similar to that.

Often times, organizations discuss a new strategy that tends to diverge from the typical operation of the entity. This is certainly a good time for managers at the table to ask the question "does this fit within out vision or mission statement?" If not, it is probably is not something that should be considered.

Visions and missions are normally thought of as the guiding cornerstones for the company, however, they could be used for a division, function, or department within the company. Of course government and non-profit agencies may also employ them for the same purposes.

Missions are not the same as a motto, although they often do appear to be serving the same function. A motto is fine --- such as the customer is always right. However, this really doesn't provide an adequate description of the company -- this is what a mission does. I really don't think it is critical that lower level employees fully understand the company mission as that is a mangement role. I am aware of some companies that requires all employees to memorize the mission statement but when asked what it means, they shrug their shoulders. Lesson learned.