Readability vs Legibility

Legibility is how easy it is to determine all the letters in a given context such as banners, headers and other shorter lines of text.
Readability is how easy it is to read larger blocks of text and still be able to comprehend it.
Typography plays a big roll in this because depending on the readability and/or legibility of your web site determines how long visitors stay and peruse it. For more informative sites that provide a lot text, you would want readability to be the #1 priority when determining the typography. For more of a ecommerce site, you might want the item descriptions to be more readable and the item captions to be more legible.