The 7 Layers of the OSI Model (PDNTSPA)

The Open Systems Interconnection Reference Model (OSI Reference Model or OSI Model) is an abstract description for layered communications and computer network protocol design. It was developed as part of the Open Systems Interconnection (OSI) initiative. In its most basic form, it divides network architecture into seven layers which, from top to bottom, are the Application, Presentation, Session, Transport, Network, Data-Link, and Physical Layers. It is therefore often referred to as the OSI Seven Layer Model.

Description of OSI layers
The OSI Model is displayed from top-down (Meaning Layer 7-1) in order to show that the act of transmitting data is not a one-way trip. Once data reaches the Physical Layer (Layer 1) and reaches its destination, it must travel back up the OSI Model (1-7). The only exception to this is that on the way back up, it does not interact with the network layer.

Layer 7: Application Layer
This layer supports application and end-user processes. Communication partners are identified, quality of service is identified, user authentication and privacy are considered, and any constraints on data syntax are identified. Everything at this layer is application-specific. This layer provides application services for file transfers, e-mail, and other network software services. Telnet and FTP are applications that exist entirely in the application level. Tiered application architectures are part of this layer.

Layer 6: Presentation Layer
This layer provides independence from differences in data representation (e.g., encryption) by translating from application to network format, and vice versa. The presentation layer works to transform data into the form that the application layer can accept. This layer formats and encrypts data to be sent across a network, providing freedom from compatibility problems. It is sometimes called the syntax layer.

Layer 5: Session Layer
This layer establishes, manages and terminates connections between applications. The session layer sets up, coordinates, and terminates conversations, exchanges, and dialogues between the applications at each end. It deals with session and connection coordination.

Layer 4: Transport Layer
This layer provides transparent transfer of data between end systems, or hosts, and is responsible for end-to-end error recovery and flow control. It ensures complete data transfer.

Layer 3: Network Layer
This layer provides switching and routing technologies, creating logical paths, known as virtual circuits, for transmitting data from node to node. Routing and forwarding are functions of this layer, as well as addressing, internetworking, error handling, congestion control and packet sequencing.

Get more details about IPv4 subnetting reference (Source - wikipedia)

Layer 2: Data Link Layer 
At this layer, data packets are encoded and decoded into bits. It furnishes transmission protocol knowledge and management and handles errors in the physical layer, flow control and frame synchronization. The data link layer is divided into two sub layers: The Media Access Control (MAC) layer and the Logical Link Control (LLC) layer. The MAC sub layer controls how a computer on the network gains access to the data and permission to transmit it. The LLC layer controls frame synchronization, flow control and error checking.

Layer 1: Physical Layer
This layer conveys the bit stream - electrical impulse, light or radio signal -- through the network at the electrical and mechanical level. It provides the hardware means of sending and receiving data on a carrier, including defining cables, cards and physical aspects. Fast Ethernet, RS232, and ATM are protocols with physical layer components.

RECOMMENDED READING:

"The OSI Reference Model — Understanding Layers" in Webopedia's "Did You Know...?" section."Understanding The Data Link Layer" in Webopedia's "Did You Know...?" section.