QNH environment: All altitudes expressed relative to MSL (mean sea level). Altimeters are set to a given pressure (the QNH), and the altimeter in the aircraft, will read the aerodrome elevation when the AC is on the ground.
QFE environment: All altitudes expressed relative to height above aerodrome level. Altimeters are set to a given pressure (the QFE), and the altimeter in the aircraft, will read 0 when the AC is on the ground.
See also the discussion where does "QNH" come from
Nick.
[ 07 August 2001: Message edited by: Nick Figaretto ]