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Simultaneous hermaphrodites are organisms which have both male and female sexual organs. The most famous example of a simultaneous hermaphrodite is probably the snail. When snails mate, both parties exchange genetic material, with sperm being contained in “arrows” of calcium carbonate. Many other slug species are also simultaneous hermaphrodites, as are some fish.
The term “hermaphrodite” is often used generically to describe any sort of organism which has sexual characteristics associated with both genders. The term is derived from a character in Greek mythology who was merged with someone of the opposite gender, creating an entirely new individual with both male and female characteristics. As a side note, it is considered offensive to describe humans with ambiguous genitalia or amorphous sexual characteristics as “hermaphrodites.” Most people prefer to use the term “intersexual” to describe such individuals.
This type of sexual development can be contrasted with gonochorism, in which the sexes are distinct and very different. Most mammals, including humans, are gonochorists. Some other animal species have evolved to demonstrate sequential hermaphroditism, in which the gender of the animal changes at some point during its lifetime. Sequential hermaphrodites are usually fish; the clownfish is a notable example of a sequential hermaphrodite.
There are some distinct evolutionary advantages to being a simultaneous hermaphrodite. For example, some animals are capable of self-fertilization. These species can also reproduce more rapidly, since both parties involved can generate eggs and sperm, thereby more widely distributing the species. Damage to the sex organs of the organism also doesn't always spell the end of sexual reproduction, because the organism has another set.
Some people also view pseudohermaphrodites such as hyenas as simultaneous hermaphrodites, because they appear to have the physical sex characteristics of both genders, and sometimes they manifest behavioral characteristics which are reminiscent of both genders. The case of hyenas is rather interesting; female hyenas develop a sort of false penis, with dominant females sometimes mimicking male behavior to enforce their position in the pack. However, hyenas are not true hermaphrodites, because their sex organs are all female, despite outward appearances.
In some cases, these organisms have specific biological measures in place which prevent self-fertilization, to increase biodiversity. Earthworms, for example, are simultaneous hermaphrodites, but they must mate with other earthworms to produce fertilized eggs. Other simultaneous hermaphrodites like banana slugs are capable of self-fertilization, but they are biologically predisposed to seek out mates.