Each team is made of one amateur and one professional golfer. The professional golfer plays with no handicap as usual, but the amateur gets strokes from their handicap. The strokes are designated to the holes which correspond to the amateurs' handicap. If they get a shot on a hole and make par, that counts as one under etc. In the Pro Am at Pebble Beach, there are three rounds in each all amateurs play, then the top 25 get to play the final day. The amateurs play off forward tees, sometimes as far as 100 yards ahead of the pros.
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A Pro Am is where, there are teams of two, one professional and one amateur. These usually happen on the Wednesday immediately before each tour event. The amateurs have to pay for their places and the places can be very expensive. For an example, the high profile Pro Am the AT & T at Pebble Beach is a 4 day event with celebrities buying up the amateur places. The amateurs play off forward tees with a handicap and the combined scored determines the winners.
Pro-Am means Professional-Amateur. It basically means newbies get a chance to team up with the pros and play a game of Basketball.