Sherry is a fortified wine, and while this might lead you to consider simularites to Port, there is very little in common between the two.
Traditionally, a proper sherry can only be produced in a region near Jerez de la Frontera, Spain. It is made almost exclusively from the Palomino Fino grape. The process of making a sherry relies heavily on blending, which means that there is rarely a vintage designation associated with a sherry since it will consist of a combination of different harvests. A key benefit of this process is that there will be consistancy from year to year of the sherries from a particular producer.
All sherries can trace their classifications down to two basic styles, Fino and Oloroso. The primary difference between these two types, is that a Fino sherry is the result of the spontaneous develpoment of an indigenous yeast known as "Flor". Once developed, they will float on the top of the wine and act as a barrier to oxidation. All Fino sherries start with this development of Flor, and sherries that don't produce flor result in Oloroso sherries.