Background and History!

Urban legends are popular stories alleged to be true which spread from person to person via oral or written communication (e.g., fax or email). Typically, said stories concern outlandish, humiliating, humorous, terrifying, or supernatural events — events which, in the telling, always happened to someone else.
In lieu of evidence, the teller of an urban legend relies on narrative skill and reference to allegedly trustworthy sources (e.g., "I heard this from a friend of a friend") to bolster its credibility. Sometimes, but not always, there's an implied moral message, e.g., "Be careful, or the same thing could happen to you!"
Urban legends are a type of folklore — defined as the beliefs, stories and traditions of ordinary people ("the folk") — thus, one way of differentiating between urban legends and other kinds of narratives (popular fiction, for example) is by examining where they come from and how they are disseminated. Legends tend to arise spontaneously and are rarely traceable to a single point of origin. And again, they spread primarily from individual to individual through interpersonal communication, and only in atypical cases through mass media or other institutional means.
Because they end up being repeated by many different people in many different places, the stories tend to change over time. Hence, no two versions of an urban legend are ever exactly alike; there can be as many variants as there are tellers of the tale.

  While it's true that the phenomena we commonly refer to as "urban" legends are more accurately characterized as "contemporary" legends (after all, the stories don't always take place in big cities), the more familiar phrase picturesquely differentiates between these latter-day folktales and their traditional, mainly rural predecessors. It makes a better catchphrase, too. You're welcome to call them contemporary legends if you like. Many folklorists do.

  "urban myth" and "urban legend" are synonymous. Academic folklorists tend to eschew the term "urban myth," however, because a myth, strictly defined, is a sacred story pertaining to gods, goddesses and the origin of all things.