Extend is used when a use case adds steps to another first-class use case.

For example, imagine "Withdraw Cash" is a use case of an 
Automated Teller Machine (ATM). "Assess Fee" would extend 
Withdraw Cash and describe the conditional 
"extension point" that is instantiated when the ATM user 
doesn't bank at the ATM's owning institution. Notice that the basic
"Withdraw Cash" use case stands on its own, without the extension.

Include is used to extract use case 
fragments that are duplicated in multiple use cases. 
The included use case cannot stand alone and the original use case is 
not complete without the included one. This should be used sparingly and 
only in cases where the duplication is significant and exists by design 
(rather than by coincidence).

For example, the flow of events that occurs at the beginning of every ATM
use case (when the user puts in their ATM card, enters their PIN, and 
is shown the main menu) would be a good candidate for an include.