THE DIFFERENCE BETWEEN AIR BARRIERS AND VAPOUR BARRIERS
The job of a vapour barrier is to prevent vapour diffusion, and the job of an air barrier is to stop air leakage through differences in air pressure. A wall system should have one vapour barrier but can have many air barriers. A vapour barrier can act as a very effective air barrier, but an air barrier does not (and should not) always stop vapour from diffusing.
A wool sweater, for example, is a good choice of natural insulation and will keep you warm when there is no air movement, but will allow the wind to howl right through it. A wool sweater with a raincoat will keep you warm but hold moisture inside and soak your insulation. A wool sweater with a windbreaker will keep you warm, stop the wind from stealing your heat, yet allow moisture to diffuse through it.
So think of a windbreaker as an air barrier and a raincoat as a vapour barrier.
Since warm air expands, there is more space between its molecules compared to cold air. Water vapour is found in that space. When warm air cools as it passes through your walls, it contracts and squeezes out the moisture, leaving you with condensation. In order to prevent condensation from forming, a vapour barrier should be placed on the warm side of your insulation to stop warm, moist air from condensing on a cold surface inside your wall.
In cold climates like Canada, for most of the year, the vapour barrier should be on the inside of the insulation(Warm side). In hot climates like the southern U.S. for example, the vapour barrier should be installed on the outside of the insulation, especially where there's air-conditioning involved to prevent condensation and mold. In both cases, the vapour barrier is tasked with preventing warm, humid air from shedding its moisture as it meets a cool surface, no matter which direction it is travelling. The most important thing to realize is that there is no fixed rule regarding vapour barriers. Building practices should always be determined by the climate in which you are building.