Definition:

The Aesthetic-Usability effect is the perception that more aesthetically pleasing interfaces are easier to use than less aesthetically pleasing ones. "Pretty" or "sexy" interfaces are also more likely to be used regardless of if they actually are easier to use.

Interaction Design:

Contemporary interaction models crafted by companies like Apple, BMW and Bank of America are prime examples of this practice. Studies have shown that users may create more errors on an iPhone than a Blackberry, but users will overwhelmingly agree that the iPhone was much easier to use. Rackspace's new Unbounded List widget is much more aesthetically pleasing than its previous version, two <select> boxes, and hopefully our users will find is more usable because of its improved look and interaction methodology.

User Experience Design:

Bank of America's new envelope-free deposits on their ATM's are actually slower than their previous counterparts because (I'm guessing here) the machine now has to count cash as it is deposited instead of accepting any envelope and having it hand-checked later. This process may be 10 seconds slower, but it seems more usable because you don't have to fight to insert cash inside an envelope and sealing it while it's 20 degrees outside.