A handheld microphone is just like it sounds - a mic you hold in your hand to record your own or someone else's voice.

Handheld microphones are particularly good for doing quick interviews with people, such as a "man-on-the-street" interview.

You should definitely use a handheld microphone if you're doing an interview where there is a lot of ambient sound - traffic, wind, or other voices. The handheld microphone will tend to screen out a lot more of that sound than the built-in mic on a video camera.

Handheld microphones, such as the Sennheiser depicted above, usually do not have any batteries or other power source (a microphone like this that doesn't need a power source is called a "dynamic" mic).