Waterproof, water resistant or DWR 
Most waterproof jackets will use fully waterproof material and constructed of 2 or more layers. In a typical 3 layer jacket, the outer layer or face of the fabric gives the jacket its colour. The outer layer is usually a fully sealed layer and is the first line of defence against the rain. Next up is the middle layer, this is usually a membrane stuck between the backer or inside of the short and the outer layer. This membrane will be a highly sophisticated material that has many holes across the surface, these holes will be too small to let water in but will allow vapour to be released, the quality of this layer contributes to both the waterproofness and the breathability rating of the jacket. Lastly, the inner layer protects the membrane from damage.
Some jackets will be labelled water resistant, these are designed using material which can be DWR (durable water repellent) coated to fend off a light shower or light rain and trail spray. Some softshells or windhsells, for example, will have the outer layer treated with a DWR coating. This waterproofing repellent coating is applied to the outer fabric to prevent absorption of water, letting it just run off instead. These jackets will keep you protected to an extent but you are likely to still get soaked should the heavens open. On the flip side though they are sometimes more breathable so good for warmer rides or for use in changeable weather.
Taped seams are a must
A good waterproof jacket will have fully taped and sealed seams. Seams and material joins are taped using a strong nylon cloth with a rubber backing, to prevent water ingress where the stitching needle leaves a hole. Dealing with the seams in this way ensures water does not get through to the wearer and also increased the durability of the kit.