This may be a dumb question but what is the difference between a Pension and a Hotel?
What makes a Pension a Pension?

A small hotel that offers less services.

Pension(e)s are usually family-run and/or owned, and are never part of a chain. As Bob mentions above, they don't have the services of a full-scale hotel (concierge, porters, room service, and so forth.) Those in more rural locations often offer meals.

But there's no consistency re terminology. Many small, family run places that call themselves hotels could also be termed pensione(s)/hostals, or whatever is appropriate for the country in which they are located.

I finally found the answer to this only a couple days ago, by sheer dumb coincidence. It was part of an Austrian hotel's website.

A pension is a hotel that does not occupy every floor of a building, but rather shares the building with other businesses or residences. Usually the floor(s) it occupies does not include the ground floor.

I don't know about the occupying the ground floor or not, but the official distinctions and ratings usually mean that a pension doesn't have an elevator, rarely has a/c, sometimes provides a meal but not always, sometimes has private baths but not always, etc.
Hotels fall in to various categories, too, depending on their services and amenities.

Each country has different gov't requirements for a lodging to be in its category--where were you thinking?

The Austrian definition must not apply everywhere. We stayed in a pension in Hohenschwangau, Germany, that was just like a very nice B&B in the USA. It was at one time a private house; owner lived in part of the ground floor; guest rooms (with private baths) on both floors; off street parking; breakfast included.

Thanks all, I think that a few places I have stayed at were pensions. I think I prefer them over hotels. When traveling I am not to picky on where I stay. All I am looking for is that the place is clean, safe and convienent to public transportation. After all I am in Europe to see the sights and taste teh local flavor not to compare hotels.