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Discount rate is the borrowing rate that banks borrow money at the Fed's discount window. But usually, banks are not willing to borrow money from the Fed as the Fed will "mark down" (所謂的"記名") and that's why unless banks are in big trouble, they are not willing to borrow from the discount window usually. This is the usual practice in the past as I know.
However, since the financial tsunami broke out, the Fed seemed not to use the "mark down" practice (to encourage borrowing), and banks are more "willing" to borrow from the Fed. (不肯定現在借錢是否還不需要記名) Therefore, increase the discount means the cost of borrowing would be higher.
Regarding the Fed rate, it's a interest rate on over-night loans that banks make to each other. Borrowing from other banks are more usual rather than borrowing from the Fed directly. So that's why we hear the Fed rate more commonly.
These two rates are also the instrument of monetary policy. Increasing the discount rate is a signal that the Fed would like to contract the money supply.
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jg-xs1
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