1. Vim stands for 'Vi Improved'. Vi is one of the most popular and powerful editors in the Unix world. Vi is an abbreviation for "Visual" editor. One of the first editors was a line editor called 'ed' (and 'ex'). The Visual editor like Vi was a vast improvement over line editors like 'ed' (or 'ex'). The editors 'ed' and 'ex' are still available on Linux: see 'man ed' and 'man ex'. A good editor improves programmer productivity. Vim supports color syntax highlighting of program code and also emphasises text using different fonts like normal, bold or italics. A color editor like Vim can improve the productivity of programmers by 2 to 3 times!! Programmers can read the code much more rapidly as the code syntax is colored and highlighted. From VIM-HOWTO

2. Vi IMproved - enhanced vi editor Vim is an almost compatible version of the UNIX editor Vi. Many new features have been added: multi level undo, syntax highlighting, command line history, on-line help, filename completion, block operations, folding, unicode support, etc. From Debian 3.0r0 APT