Hue determines the basic color—whether it appears green, red, blue, orange, and so forth.
A color's hue has a strong effect on how it is perceived. A color from the center of the red part of the spectrum will be perceived as more threatening, or perhaps more passionate, than one that is closer to orange; while red with a pinkish hue is a calmer color.
Saturation refers to the amount of grey in a color, and determines how vivid it is. Minimum saturation corresponds to gray, whilst maximum saturation corresponds to the pure color.
As a general rule, women tend to prefer less saturated colors, and men more saturated ones.
Luminosity refers to the whiteness or intensity of a color; luminosity for any one color will range from pure white though to black. Luminosity is like the brightness control on a computer or television screen. Maximum luminosity corresponds to white for any color, whilst minimum luminosity corresponds to black. The middle value corresponds to the pure color.
Using the same color at varying degrees of luminance in a palette results in a harmonious color scheme. In general, colors with more luminance feel lighter, while those toward the dark end of the scale are more "serious" colors.