what exactly is wet and dry, i have come across it several times when making models and as of yet i am not totally sure what it means, any help would be greatly appreciated

Unlike normal wood working sand papers, wet and dry are designed to be used either dry, or wet with water.
The water keeps them from clogging, thus prolonging it's life, and also lubricates, and produces a finer finish. They also come in much finer grits.

Yep..... And it's Generally used by the Automotive industry to Wet sand Auto paint.