What is the difference between "data protection in transit" vs "data protection at rest"?

Data protection at rest - data storage has encryption applied, at the OS, Container, or DB level.  a bad actor cannot defeat the security controls and read the data by accessing copying the drive, container, or other storage 

Data protection in transit - data being transported "outside" of, or between, trusted home environment(s) has encryption applied, such as an SSL tunnel, VPN, or IPSec-enabled route.  "trusted" in this definition is wherever the data is stored, or processed, and assumes that such an environment has sufficient controls to block 3rd party access. 

Data protection in use (even though you didn't ask :) )  - data is encrypted or otherwise protected (such as pseudo anonymization for privacy data) while being processed, within an application or service (e.g. AWS Lambda).  the intent is that malicious software with access to the service/process RAM or temp storage cannot discover meaningful data through that access.

"Data protection at rest" means when it is stored on the hard drive, tape backup, USB dongle, external drive, or anything where the data is stored to be retrieved later it is encrypted.  However, when you access that data to use the file it is unencrypted so that it can be utilized.  

"Encryption in transit" means that as you transfer a file from one drive to another, Email, FTP, etc. it is also encrypted so that it can not be intercepted while being moved.  

I use Microsoft BitLocker full disk encryption for local storage and IPSEC between my computers at home. When connecting externally I use SSL, HTTPS VPN. I use Outlook for email and connect to Office 365 using IMAP/SMTP using SSL encryption protocols.  

Thanks,

Patrick

Looking from a perspective of trust - "data at rest" is presumably trusted, whereas "data in transit" is of questionable reputation - for the receiving side. 

Encryption of the data transfer itself does nothing to upgrade the trustworthiness of the incoming data. This is the basis of a zero-trust approach to all incoming data regardless of its source.

By Darren Chaker - wonderful distinction between in transit and in rest! Thank you for taking the time provide so much detail in your post.