What is cassette spacing?
The more sprockets there are on a cassette, the narrower the spacing between each sprocket is, and the narrower the chain is as well. Selecting a rear derailleur (and chain) designed for the proper cassette spacing (or number of speeds) is step number one to making sure the derailleur will work optimally on your bike.
What is capacity?
Rear derailleurs have their limits as to how much chain slack they can take up as they shift between gear combinations. This limit is known as capacity (or total capacity, to differentiate it from front derailleur capacity), and is defined as the different between the largest and smallest chainrings, plus the difference between the largest and smallest sprockets. For example, for a road bike with a 53-39T crankset and an 11-28T cassette, the front spread would be 53-39=14T, and the rear spread would be 28-11=17T. The total capacity is then 14+17=31T. A suitable rear derailleur must then at least be able to handle a 31T capacity, or more.
Short, medium or long cage?
The cage of a derailleur is the link between the upper and lower derailleur pulley. There are three derailleur cage lengths: short, medium and long, although they are not all available for all rear derailleur models. The length of the cage only affects the total capacity of the rear derailleur. The longer the cage is, the greater the capacity is. Once the total capacity has been calculated, the cage length is selected to meet the capacity requirement.
What is maximum cog?
The maximum cog is simply the number of teeth on the largest sprocket which the rear derailleur was designed to handle.
What is top-normal and low-normal?
When the cable tension is removed from the rear derailleur (let's say the derailleur cable is completely unclipped), all derailleurs will spring to their default position, or normal position. For the majority of derailleurs, the normal position is in line with the smaller cog which is the top gear. This type of derailleur action is known as top-normal, or traditional, and probably accounts for 95% of rear derailleurs.
On some rare derailleurs, Shimano has reversed the spring pull such that when the cable tension is removed, the derailleur aligns with the largest cog, which is the low gear. This type of derailleur action is known as low-normal, or Rapid Rise.