Just click on this older thread... everything you wanted to know about Morgan grading: http://www.cointalk.com/t115123/
AU is a description used to identify a coin, medal or token and paper currency that exhibits a condition which suggests the item was used in circulation but has the preservation of not being circulated , about uncirculated . MS is an abbreviation used when describing Numismatic items that have virtually no indications of having been circulated or used in circulation. Mint State . Often times that terminology may be used to describe the state of preservation or use of Literature as well. Here is a link with some information about grading terminology and scales. http://en.wikipedia.org/wiki/Coin_grading The previous discussion is a good reference as well and perhaps a bit more helpful with this coin.
As indicated by the posts, the difference between MS and AU may be extremely tough for new graders to determine. Oldies commonly use the term "slider" , meaning that it slides between MS ( usually on the seller side) to AU ( on the buyer side). Many have sent what they thought and bought as a MS to a TPG and have it come back AU 55-58. Thus the "MS-64/AU-58" coin. Some, the difference is a huge $$. heck out the 1884-S Morgan in AU58 and MS-63. Jim