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Idealism is the philosophy that believes the ultimate nature of reality is ideal, or based upon ideas, values, or essences. The external, or real world cannot be separated from consciousness, perception, mind, intellect and reason in the sense of science.

Idealism is the family of views which assert that reality, or reality as we can know it, is fundamentally mental, mentally constructed, or otherwise immaterial. Epistemologically, idealism manifests as a skepticism about the possibility of knowing any mind-independent thing. In a sociological sense, idealism emphasizes how human ideas especially beliefs and values shape society.

As an ontological doctrine, idealism goes further, asserting that all entities are composed of mind or spirit. Idealism thus rejects physicalist and dualist theories that fail to ascribe priority to the mind.

Classical/Monistic Idealism-
Monistic idealism holds that consciousness, not matter, is the ground of all being. It is monist because it holds that there is only one type of thing in the universe and idealist because it holds that one thing to be consciousness.

Subjective Idealism-
Subjective Idealism (immaterialism or phenomenalism) describes a relationship between experience and the world in which objects are no more than collections or "bundles" of sense data in the perceiver.

Transcendental Idealism-
Transcendental idealism, founded by Immanuel Kant in the eighteenth century, maintains that the mind shapes the world we perceive into the form of space-and-time.

Objective Idealism-
Objective idealism asserts that the reality of experiencing combines and transcends the realities of the object experienced and of the mind of the observer.

Pluralistic Idealism-
Takes the view that there are many individual minds that together underlie the existence of the observed world and make possible the existence of the physical universe. Unlike absolute idealism, pluralistic idealism does not assume the existence of a single ultimate mental reality or "Absolute.''

Absolute Idealism-
Absolute idealism is G.W.F. Hegel's account of how existence is comprehensible as an all-inclusive whole. Hegel called his philosophy "absolute" idealism in contrast to the "subjective idealism" of Berkeley and the "transcendental idealism" of Kant and Fichte, which were not based on a critique of the finite and a dialectical philosophy of history as Hegel's idealism was. The exercise of reason and intellect enables the philosopher to know ultimate historical reality, the phenomenological constitution of self-determination, the dialectical development of self-awareness and personality in the realm of History.

Platonic Idealism-
According to Platonic Idealism, there exists a perfect realm of Form and Ideas and our world merely contains shadows of that realm.

In whole, Idealism refers to any philosophy that argues that reality is somehow dependent upon the mind rather than independent of it. More extreme versions will deny that the 'world' even exists outside of our minds. Narrow versions argue that our understanding of reality reflects the workings of our mind first and foremost that the properties of objects have no standing independent of minds perceiving them.


Notable Books on Idealism:
The World and the Individual, by Josiah Royce
Principles of Human Knowledge, by George Berkeley
Phenomenology of Spirit, by G.W.F. Hegel

Important Philosophers of Idealism:
Plato
Gottfried Wilhelm Leibniz
Georg Wilhelm Friedrich Hegel
Immanuel Kant
George Berkeley
Josiah Royce

The nature and identity of the mind upon which reality is dependent is one issue that has divided idealists of various sorts. Some argue that there is some objective mind outside of nature, some argue that it is simply the common power of reason or rationality, some argue that it is the collective mental faculties of society, and some focus simply on the minds of individual human beings.

'Idealism is fine, but as it approaches reality, the costs become prohibitive.'
William F. Buckley, Jr.

Sources:
http://en.wikipedia.org/wiki/Idealism
http://atheism.about.com/od/philosophyschoolssystems/p/idealism.htm
http://jembrosorg.org/lpar/idealism-philosophy.htm
http://thinkexist.com/quotation/idealism_is_fine-but_as_it_approaches_reality-the/226941.html [quote source.]