From answer.com
Brake horsepower (bhp) is the measure of an engine's horsepower without the loss in power caused by the gearbox, generator, differential, water pump and other auxiliaries. Thus the prefix "brake" refers to where the power is measured: at the engine's output shaft, as on an engine dynamometer. The actual horsepower delivered to the driving wheels is less. An engine would have to be retested to obtain a rating in another system. The term "brake" refers to the original use of a band brake to measure torque during the test (which is multiplied by the engine RPM and a scaling constant to give horsepower).
hp (SAE)
In the United States the term "bhp" fell into disuse after the American Society of Automotive Engineers (SAE) recommended manufacturers use hp (SAE) to indicate the net power of the engine, given that particular car's complete engine installation. It measures engine power at the flywheel, not counting drivetrain losses.
SAE-certified horsepower
In 2005, the Society of Automotive Engineers introduced a new test procedure (J2723) for engine horsepower and torque. The procedure eliminates some of the areas of flexibility in power measurement, and requires an independent observer present when engines are measured. The test is voluntary, but engines completing it can be advertised as "SAE-certified".
Different strokes for different folks
