Rum is a sugar cane based spirit, primarily made in the Caribbean and Latin America, but you can really find Rum in many corners of the world.
It is traditionally distilled from molasses, sugar cane syrup or sugar cane juice. The distillate, a clear liquid, is usually aged in oak barrels, while many times ageing process and flavour finishing of Rum is done in various wine casks. Before it is bottled, water is blended into the Rum to reduce the alcohol content, diluting the aged Rum and its colour.
Common Rum classifications are White, Golden/Amber, Dark, Spiced, Añejo/Age-Dated. If your friend starts putting golden or dark Rum in his cocktail–SLAP HIM! In general, light Rums are commonly used in cocktails, while others are consumed neat.