I will admit, I'm no nail tech, but I am a nail product enthusiast. That and the knowledge from Kali, the owner of the former Kali's Nail Supply, I feel I have the authority to give this information to people, especially susceptible people. Please take this with a grain of salt, and ask questions, if it's not to me, to someone you know and trust that does nails.
Gel nails are an artificial nail enhancement designed usually to strengthen or elongate your nails, an alternative to the traditional liquid + powder acrylics. These enhancements are only in one phase, a gel-like substance (hence the name), sculpted onto the nail surface (and tip or form if your natural nail is too short) and is cured under a UV lamp. They're often refered to as a soak-off gel, which takes away a little more of the confusion.
Lots of people are familiar with the brand Calgel, which is supposed to be a natural type of gel. I've tried this one before, and I liked it. My nails were actually a bit damaged from my love-hate relationship with traditional acrylic, and after one application, my nails felt a lot stronger, and it was pretty easy to remove since the application calls for a lot less product (unlike the traditional acrylics with the curve that has to be "built" to ensure lift-prevention). For those who don't have much time to change nail polish often (on your natural nail), gel nails would be pretty good. I believe you can go weeks between fills, and polish adheres nicely to the gel.
Common brands: Calgel*, OPI Axium, CND Brisa
Gel polish is simply what it sounds like, a gel nail polish. You can't sculpt it onto your natural nail, nor can you extend your nail. Unlike regular nail polish, you cure this product under a UV lamp, and unlike a gel nail, it doesn't make your nail stronger. In fact, I believe it actually damages your nail, and dries it out. All you do is paint it on like nail polish and cure under a UV lamp.
Common brands: CND Shellac, Gellac, Calgel*
Where there is some mis-communication on the part of salon owners and their clientele is that salon owners are charging an arm and a leg to their customers for a gel "manicure," when in fact all they are doing is a gel polish manicure. There is a lot less skill and other resources involved to do a gel polish manicure than a gel nail service. Therefore, salons should be pricing their gel polish services not that much more than a regular manicure, or even just offering a gel polish upgrade for any natural nail service. The way lots of places are pricing, it makes it seem like it's a nail enhancement because the price is so similar to other enhancement services.
So, my conclusion is this: know what you are paying for. If you are in doubt and think you may be getting ripped off, ask questions. If you don't get the right answers, then leave...they don't deserve your money if they are gonna rip you off!!
*The way you can tell the soak-off gel from the polish is the container it comes in. If it looks like a nail polish bottle with a bush attached to the lid, it's a gel polish, if it's gooey and comes from a jar, without a brush attached to the lid, it's a soak off gel.