Easier. 3G is the high speed data service offered by your cellphone provider (be it AT&T or VZW, or any of the dozen carriers in the rest of the world). EDGE is data, but much slower. WiFi, on the other hand, is the internet that you can usually pick up on your computer (and also on your iPhone) when you go to places like Starbucks or a hotel which offers WiFi. WiFi doesn't require your phone be on, or connected to your carrier's network.
One step further, if there is no WiFi available and you have no bars showing, you can't get data. If you have no bars (can't make a phone call) but you are connected to a WiFi source, you can use all your data features, like instant messaging, email, etc.