Ripple is the very high-speed variability caused by the operation of the PSU.
Very simply, a voltage regulator works by switching the power on and off very quickly. On its own, this is useless, because some of the time the voltage is too high, the rest of the time there is no voltage. So, a 'filter' circuit is used to smooth out the fluctuation. So, let's say you have a PSU producing 12 V - the PSU alternates between switching on and off. When it's on the filter charges up - when the filter gets to 12.1 V, the PSU shuts off and the filter discharges. When it gets to 11.9 the PSU switches back on again. This fluctuation (which in a PC's main PSU occurs about 20,000 times per second - or in the case of the VRM for a CPU occurs about 8,000,000 times a second) is called ripple.
How much ripple you get depends on the design of the PSU. A better filter will give less ripple - but will be bulkier, heavier and more expensive. In practice most PSUs have ripple of about 0.5-1% of their voltage - so that a typical 12 V PSU will have ripple between 12.06 V and 11.94 V.
Ripple is a problem, because modern PC circuits operate very quickly - and may malfunction if the voltage they get drops below a certain level, even if only for 1/1,000,000 of a sec. The more ripple, the lower the voltage dips.
Regulation is the name given to how closely the average voltage from the PSU matches the voltage it is supposed to give. There are 2 main types of regulation:
Load regulation: This is how much the voltage changes when you change the amount of power being drawn. If you have a 12 V PSU, and it gives 12 V at idle. How much does that voltage change when you start taking 20 A. Ideally, there should be no change - in practice there will be a change. Top of the range PSUs will have regulation better than 3%. This means for a 12 V PSU that the fluctuation will be less than 0.36 V from idle to maximum load (e.g. it might go from 12.18 V at idle to 11.82 V when maxed out). A lower grade PSU might only have 5% regulation.
Line regulation: This is how much fluctuation in the mains voltage gets through to the output of the PSU. Say your PSU is supposed to give 12 V when powered from 120 V. What happens if your mains electricity gets browned out and drops to 100 V? How far does the output of the PSU drop? If there was no line regulation, the voltage would drop to 10 V. However, all PC PSUs have good line regulation, and the voltage would probably only drop from 12V to 11.9V.