Honeypots are computer resources designed to detect unauthorized access. They can be either virtual machines or physical devices set up to appear vulnerable. High interaction honeypots allow full access, while low interaction honeypots only emulate services. Honeypots are used for prevention, detection, and information gathering. Production honeypots focus on security, while research honeypots capture extensive data to analyze hacking tools and tactics. Both have advantages and disadvantages depending on the level of risk and data collection needed.