I get asked this question all the time, so I guess it's confusing. In a nutshell, sound design is the art or craft (depending on your perspective) of recording, editing, processing, assembling, and mixing sounds together to create informative, convincing or emotionally suggestive listening experiences. While powerful software—such as ProTools—is available to facilitate many sound design processes on personal computers, keep in mind that using these tools doesn't instantly make someone a qualified sound designer, any more than having Microsoft Word on your computer makes you a professional speech writer.
The term “sound design” originated in live theatre to describe the creation of sounds and aural montages specifically for stage plays. In theatre, sound design is a unique department, like lighting design. In the film world, the term first became synonymous with sound editing in 1969, when the great Walter Murch was credited as sound designer on Francis Ford Coppola’s The Rain People. Coppola recalls that, because Murch “wasn’t in the union, the union forbade him getting the credit as sound editor—so Walter said, Well, since they won’t give me that, will they let me be called ‘sound designer’? We said, We’ll try it—you can be the sound designer . . . I always thought it was ironic that ‘Sound Designer’ became this Tiffany title, yet it was created for that reason. We did it to dodge the union constriction.”
David Collison’s fabulous new book, The Sound of Theatre, is a wonderful, illustrated introduction to the development of sound design for theatre from the ancient Greeks to the modern digital age. For more information: http://www.lsionline.co.uk/books/?jzpz5l