SEM=SEO+PPC SEO is within SEM, SEM includes the paid options such as adword in Google etc. So you want to market your site in the Search engine that's SEM (Search Engine Marketing), You can do that free by SEO and by buying ppc ads. Hope this helps!
The lines are a bit blurred, but in simple terms: Search engine optimization is improving website visibility in search engines, usually by free methods like following HTML standards and building content. Search engine marketing is a type of online marketing that focuses on search engines - this can include normal search results but also PPC/paid search placement.