An annotated bibliography is a list of citations followed by a descriptive summary and/or evaluation.
Sometimes the annotation will reflect the applicability of the source to the needs of the researcher.
The purpose of this type of bibliography is to inform the reader of the relevance, accuracy, and quality of the sources cited.
An annonation may include some or all of these parts:
Gurko, Leo. Ernest Hemingway and the Pursuit of Heroism. New York: Crowell, 1968.
This book is part of a series called "Twentieth Century American Writers": a Brief Introduction to the Man and his Work. After fifty pages of straight biography, Gurko discussed Hemingway's writing, novel by novel. There's an index and a short bibliography, but no notes. The biographical part is clear and easy to read, but it sounds too much like a summary.
Example borrowed from the Writing Center at UNC- Chapel Hill.
An additional example can be found in Diane Hacker's MLA Annotated Bibliography.
Below are the most common types of annotated bibliographies: