This term designate in the business vocabulary a business contact registered with a potential client. A lead can be generated by a commercial channel (sales point, trade show and faire, business development) or by other means (web form, incoming calls, ...).
In marketing and sales practice it will designate a BtoB contact.
These contacts may be more or less qualified. Often this qualification will be due to the generation channel.
If in general we are confusing leads and prospects it is because their definition can be very close and variable. In practice we will refere as lead an upstream contact while a prospect will designate a lead with a great potential of conversion as a client.