Pork shoulder is one of those cuts of meat that pretty much screams at you what it is. It's meat from the shoulder of the pig.
Not Too Simple
But wait, it isn't quite that simple (not too much in the world of butchery is).
The tricky part comes in with pork butt. That cut's name isn't quite as transparent, and far from coming from the hindquarters of the pig, which the name would imply, cuts labeled "pork butt" actually come from the shoulder.
So when a recipe calls for 3 pounds of pork shoulder or pork butt, it's not being obnoxious, it's being practical. Ditto when your butcher suggests a nice butt when you ask for a shoulder.
The Difference Between a Shoulder and a Butt
Yet there is, traditionally, a different between pork shoulder and pork butt. Cuts labeled "pork shoulder" (including a "picnic shoulder") are from the thinner, triangle-shaped end of the shoulder whereas the "butt" is from the thicker, more intensely marbled end of the shoulder.
As such, pork shoulder is a bit better for cooking whole and slicing, whereas pork butt is perfect for making pulled pork and other recipes in which the meat is meant to fall apart (the streaks of fat that run through it, creating the marbling, make it fall apart more easily once it's cooked to tenderness).
Both, however, are great cut up and used as stew meat and in chilis. And you can, if necessary, use them interchangeably in most recipes.
How to Cook Pork Shoulder
What they do have in common (besides their place of origin on the pig) is that both pork shoulder and pork butt benefit from long, slow cooking that tenderizes them melts the fat that runs through them. The shoulder is an area (unlike cuts from the interior of the pig like the loin) that sees a lot of activity when a pig is alive.
Those muscles work hard carrying all that weight around. They get built up and tend to have more flavor than more tender cuts, but they must be cooked accordingly.
Pork shoulder can be roasted but fares best when done with some liquid in the pan and when kept covered for most of the roasting, as in this Pork with Pears and Chiles.
It's as commonly braised in a pot or cut up and used in stews (Red Chile Pork Stew and Green Chile Pork Stew are favorites at my spicy-oriented house). Shoulder also works nicely in Posole, since the chunks tend to stay together more than when using pork butt.
Shoulder is also a good cut for using when making ground pork.
Note: Many styles and regional variations exist in butchery, so when in doubt, ask your butcher for specifics.