The all-important capacity factor captures the amount of actual power generated by a power plant as compared to its nameplate capacity or rated output. It can be externally measured, as the actual output of the plant over a period of time, divided by the output it would have generated in ideal conditions based on its nameplate capacity.
The capacity factor is almost always lower than the availability factor, in some cases (most variable renewable energy sources) much lower. It can, rarely, be momentarily higher if the actual output of a highly available plant is higher than its nameplate capacity (which would have had to be conservatively calculated).
A high-capacity factor is, in general, obviously better than a low capacity factor. But, in some cases, capacity factors can be kept low on purpose:peaking plants (typically gas- or oil-powered) are only put in use when needed by peak demand, and their capacity factors are low for that reason, even though their availability factor is very high.
Sadly, variable renewable energy (solar and wind in particular) plants carry very low capacity factors, due to the intermittency of their resource (solar or wind). What this means is that a 350MW solar farm with a 20% capacity factor is equivalent, in total energy produced, to a 90MW coal plant with an 80% capacity factor.
As shown by these NREL numbers above, the capacity factor for wind farms is between 35% and 40%, that for solar farms is between 20% and 25%, hydropower is around 70% (although in the EIAS lists it, for the US, around 44%), coal is about 80%, geothermal about 90% and nuclear around 95%. Gas, often used in peaking plants, has a capacity factor varying between 10% and 90%.
2006 DOE numbers are similar, as shown by the following table:
The EIA is now providing monthly tables of capacity factors, which are also instructive, as you can see capacity factors changing over time:
The reason why coal and nuclear plants remain on all the time, by the way, is that they are very difficult to turn on and off, while gas- and oil-powered plants are much easier to ramp up or down – which is why they are typically used as peaking generators when demand peaks.