When I mount a Mac hard drive on another computer, I often get prompted to "unlock" the drive. What does this mean? Is a locked hard drive different from an encrypted one, or is "unlocking" just decrypting the drive for one-time use (as opposed to permanently decrypting)? When I boot the drive in its normal computer I'm not prompted for a FileVault password, which is what's making me wonder if this is encryption-related or not.
A locked hard drive is a hard drive that is encrypted.
When you unlock the drive you are telling the system how to interpret the encrypted data. Unlike permanent decrypting, the data on the drive stays encrypted, you are just telling it how to read the encrypted data on the fly.
On its normal computer information will have been saved into the system's keychain allowing it to access the drive without prompting you for a code. If you open Keychain Access on that Mac and search for the name of the drive, or sort the list by "Kind", you should find an "encrypted volume password" entry. That is what the Mac is using to unlock the drive without prompting you.