What is the difference between a "formal" and "informal" geologic unit?

The answer may be more than you ever wanted to know! Here is the explanation, from the North American Stratigraphic Code.
(North American Commission on Stratigraphic Nomenclature, 2005, North American Stratigraphic Code: American Association of Petroleum Geologists Bulletin, v. 89, no. 11, p. 1560.)

Formal and Informal units

Although the Code emphasizes formal categories of geologic units, informal nomenclature is highly useful in stratigraphic work.

Formally named units are those that are named in accordance with an established scheme of classification; the fact of formality is conveyed by capitalization of the initial letter of the rank or unit term (for example, Morrison Formation). Informal units, whose unit terms are ordinary nouns, are not protected by the stability provided by proper formalization and recommended classification procedures. Informal terms are devised for both economic and scientific reasons. Formalization is appropriate for those units requiring stability of nomenclature, particularly those likely to be extended far beyond the locality in which they were first recognized. Informal terms are appropriate for casually mentioned and innovative units. Also, most economic units, those defined by unconventional criteria, and those that may be too thin to map at usual scales may be informal.

Casually mentioned geologic units not defined in accordance with this Code are informal. For many of these, there may be insufficient need or information, or perhaps an inappropriate basis, for formal designations. Informal designations as beds or lithozones (the pebbly beds, the shaly zone, third coal) are appropriate for many such units.

Most economic units, such as aquifers, oil sands, coal beds, quarry layers, and ore-bearing "reefs," are informal, even though they may be named. Some such units, however, are so significant scientifically and economically that they merit formal recognition as beds, members, or formations.

Innovative approaches in regional stratigraphic studies have resulted in the recognition and definition of units best left as informal, at least for the time being. Units bounded by major regional unconformities on the North American cratonwere designated "sequences" (example: Sauk sequence) by Sloss (1963). Major unconformity-bounded units also were designated "synthems" by Chang (1975), who recommended that they be treated formally. Marker-defined units that are continuous from one lithofacies to another were designated "formats" by Forgotson (1957). The term "chronosome" was proposed by Schultz (1982) for rocks of diverse facies corresponding to geographic variations in sedimentation during an interval of deposition identified on the basis of bounding stratigraphic markers. Successions of faunal zones containing evolutionally related forms, but bounded by non-evolutionary biotic discontinuities, were termed "biomeres" (Palmer, 1965). The foregoing are only a few selected examples to demonstrate how informality provides a continuing avenue for innovation.

The terms magnafacies and parvafacies, coined by Caster (1934) to emphasize the distinction between lithostratigraphic and chronostratigraphic units in sequences displaying marked facies variation, have remained informal despite their impact on clarifying the concepts involved.

Tephrochronologic studies provide examples of informal units that are too thin to map at conventional scales but yet invaluable for dating important geologic events. Although some such units are named for physiographic features and places where first recognized (e.g., Guaje pumice bed, where it is not mapped as the Guaje Member of the Bandelier Tuff), others bear the same name as the volcanic vent (e.g., Huckleberry Ridge ash bed of Izett and Wilcox, 1981).

Informal geologic units are designated by ordinary nouns, adjectives, or geographic terms and lithic or unit terms that are not capitalized (chalky formation or beds, St. Francis coal).

No geologic unit should be established and defined, whether formally or informally, unless its recognition serves a clear purpose.