Without going into the ins and outs, Drupal understands the .module file as being a module within the system. The .inc notation has always been used in PHP for 'include' files. When developing modules you might want to split functionality into different .inc files.

Modules being used in specific cases use conventions similar to .admin.inc. That file typically includes all the code necessary to run the administrative interface, and a file node.pages.inc for example contains the code executed for other menu callbacks.