I've never liked the term 'passive income'.
To me, passive income implies something for nothing and very few (if any) income streams, in my opinion, are truly passive. All require a certain amount of work and effort to set up and usually to maintain as well.
However, I love the term 'residual income'.
Residual income is the idea that you perform the work once and it continues to pay you long after the fact. Think of the sitcom actor who earns income each time his or her show is shown in syndication. Or the insurance agent who continues to earn commissions each time a policy is renewed.
Residual income is the beauty of eHow.
The internet is full of places that will pay you a few bucks for some writing. But at eHow you can continue to earn income on an article long after it is written and published. As long as your article continues to draw traffic and ad revenue, you'll be paid.
I know of one writer on eHow who has developed a healthy income stream and was relieved that she had that to rely on after a recent surgery. That's the power of residual income.