Another excellent infographic from the QuickSprout blog, this time on dealing with bounce rate.
Bounce rate is defined by Google as:
Bounce Rate is the percentage of single-page sessions (i.e. sessions in which the person left your site from the entrance page without interacting with the page).
BTW note that Google is changing to use the term 'sessions' instead of 'visits' (via VentureBeat) - which will start appearing in Analytics reports shortly.