Severity & Priority

Priority
Bug priority is the subjective importance rating given to a bug. It should be used by an individual component team to prioritize the bugs it has to fix. Priority of the bug implies the timeframe in which the fix is desired.  
    Priority 1: Blocking test - fix immediately
    Priority 2: Must fix before ship
    Priority 3: Would like to fix before ship
    Priority 4: Minor issue

Severity
Bug  Severity is used to indicate the customer impart of the bug.
It should be objectively filled in irrespective of the timeframe in which the bug can be fixed;

Severity 1:
    Crash
    Data loss
    Legal issue
    Security issue
    Huge break in functionality
    Any ship stopper class issue
Severity 2:
    Broken application/CE functionality, nice to have
    Loss of functionality
    High customer impact
Severity 3:
    Broken application/OS functionality, nice to have. Usability problem, content problem, small customer impact and/or hardly reproducible
Severity 4:
    Suggestion or bug that has negligible customer impact