From http://plasma.udw.ac.za/plasma/tut/tut.html:

What is a plasma?

A plasma is an ionized, electrically conducting gas of charged particles. For an ionized gas to qualify as a plasma the density of charged particles must simultaneously satisfy two important criteria: (i) the density should be sufficiently high that the long range Coulomb force be a significant factor in determining the statistical properties of the particles; (ii) it should be low enough that the Coulomb force of a near neighbour particle be much less than the cumulative long range Coulomb force exerted by the many distant particles. The most characteristic aspect of the plasma state is perhaps that the particles exhibit collective behaviour because of the long range nature of the Coulomb force.

Above a temperature of about 100,000 degrees Kelvin most matter exists in an ionized state. For this reason the plasma state is frequently called the fourth state of matter. That is, if one adds heat to a solid one obtains a liquid, add heat to a liquid and one obtains a gas, add sufficient heat to a gas and the atoms themselves become ionized and one obtains a plasma. Such high temperatures are, however, not necessary, for a plasma to exist. Provided there is a mechanism for ionizing the gas and the density is sufficiently low for recombination to be slow, a plasma can exist at relatively low temperatures. This is frequently the case in laboratory produced plasmas and, indeed, in the Earth's own ionosphere--an example of a plasma produced by photoionization of the tenous outer layers of the atmosphere.

By some estimates 99% of the observable universe is in the plasma state. Why then is there so little natural plasma on Earth? The answer is simply that the temperature here on Earth is too low and the density of matter is too high. However, as we have mentioned, as we begin to leave the Earth environment, e.g., in the upper layers of the atmosphere, we meet plasma. Still further up one would come across our nearest example of an astrophysical plasma: the solar wind. The solar wind is a tenuous plasma of ejected solar material that streams toward the earth and fills much of interstellar space. We are shielded from these energetic particles by our own Earth's magnetic field, which helps to divert the flow of the solar wind around us. However, during solar storms energetic solar particles still reach earth through the magnetic "funnels" at the poles and we observe these as aurorae. Our high altitude satellites, on which we are becoming increasingly reliant for day to day living (e.g., satellite TV and phones; global positioning systems), are, however, at some risk. For this reason a detailed knowledge of the sun and the solar wind plasma is required so that satellites can be rotated prior to the onset of a severe solar storm to avoid damage to delicate instrumentation. This has lead to the development of so-called space weather forecasting. Space weather forecasting combines plasma physics with a detailed knowledge of processes going on in our Sun, and is a modern application of plasma physics.

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Kudos to Wintersweet, who gave me the link the above came from.