A SoC is a complete system on a chip. A 'system' includes a microprocessor, memory and peripherals. The processor may be a custom or standard microprocessor, or it could be a specialised media processor for sound, modem or video applications. There may be multiple processors and also other generators of bus cycles, such as DMA controllers. DMA controllers can be arbitrarily complex, and are really only distinguished from processors by their complete or partial lack of instruction fetching.
Processors are interconnected using a variety of mechanisms, including shared memories and message-passing hardware entities such as specialised channels and mailboxes.
SoCs are found in every consumer product, from modems, mobile phones, DVD players, televisions and iPODs.