I would also add a geographic component to the discussion. Insurgents tend to operate in (or near) the region they are rising against/in, while terrorists (in the classic sense) are trans-national. They operate where and when they can. The contention that terrorists have a centralized command structure is also something of a misnomer. They can and do operate as independent units without a central command aside from a shared ideology, while insurgents can have a central command structure.

It's also important to mark a difference between a terrorist and terrorist-like methods. Insurgencies can use terrorism as a weapon, but they are not classic terrorists in my view. Insurgents have a geographic focus or base of operations, while terrorists can, but do not have to.

I think the confusion arises because terrorism is a tool as well as a group naming methodology. One can use terroristic tactics without being a terrorist, and this applies to insurgents and organized crime elements alike.

There are a number of other differences as well, but I'd need to organize my thoughts a bit better. Perhaps the biggest (to me) lies in the realm of legitimacy or perceived legitimacy. Insurgents often have (or can present themselves to have) legitimate and justified complaints against the regime existing in their region (usually tied to concrete and achievable changes or goals), while a terrorist group may have a political/ideological "goal" or "statement," but its objectives are usually Utopian or unachievable. By the second generation, most groups use these "goals" simply to justify more killing and bloodshed, and they become more nebulous and unattainable. Tom's use of extremist is good, but that term also does not convey the level of violence that a fully mature terrorist group can and will use.

Because of the political nature of many terrorist groups, you will often find disenchanted members joining an insurgency, or even providing training to such groups.