(2) A "dwarf planet" is a celestial body that (a) is in orbit around the Sun, (b) has sufficient mass for its self-gravity to overcome rigid body forces so that it assumes a hydrostatic equilibrium (nearly round) shape2 , (c) has not cleared the neighbourhood around its orbit, and (d) is not a satellite.
(3) All other objects3 except satellites orbiting the Sun shall be referred to collectively as "Small Solar-System Bodies".
1The eight planets are: Mercury, Venus, Earth, Mars, Jupiter, Saturn, Uranus, and Neptune.
2An IAU process will be established to assign borderline objects into either dwarf planet and other categories.
3These currently include most of the Solar System asteroids, most Trans-Neptunian Objects (TNOs), comets, and other small bodies.
RESOLUTION 6A
The IAU further resolves:
Pluto is a "dwarf planet" by the above definition and is recognized as the prototype of a new category of trans-Neptunian objects.1
The decision is exciting news for astronomers but it was not an easy task for the IAU to reach an agreement on the final definition. The furor began when it was found that Kuiper-belt object 
UB313, discovered in 2003 by astronomers Mike Brown (Caltech), Chad Trujillo (Gemini Observatory), and David Rabinowitz (Yale University), was slightly larger than Pluto, at approximately 2400km in diameter. This new discovery required a new planet (or several) be added to the list of “Planets” or a demotion of Pluto from the rank. Many were not happy with this idea, submitting a plethora of reasons, including historical relevance, astrological usage, text-book changes, and the confusion of children learning about our solar system. Then came about the problem of deciding what defining features actually made a planet a planet, without allowing other celestial objects to fall easily into this category either. A number of proposals were submitted and debated, settling on the final definition with more than 2500 astronomers voting on the resolution.
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Article comments
1 - Victor Plenty
Are you really saying the New Horizons spacecraft has itself visited all 8 classical planets, or is that just an accident of sentence structure?
Leaving that minor quibble aside, thanks for the excellent explanation of the issues contributing to the IAU's decision.
Now it'll be interesting to see whether the new definition will stick, both among the astronomers and in the larger cultural context.
2 - PoizonMyst
Oops .... accident of sentence structure ... sorry about that! The craft will encounter Jupiter for gravity assist in 2007 and will pass closer to the red giant than the Cassini mission, but I don't believe it is scheduled to meet with any other planets before it's arrival at Pluto.
3 - RECEYA
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