A psychic medium is a psychic who directly accesses energies higher than his or her spiritual level. A medium is also called 'psychic channel' and the act 'channeling'.
A psychic medium intentionally or unintentionally isolates, sacrifices or burns out a part of his or her psychic energy flow to be able to be able to access higher psychic energies. Such a person is like a lightning rod for psychic energies: there are places where the lightning should hit and there are places where it shouldn't. The tension between the different psychic energy levels may cause great destruction within the psychic medium if there's a mistake.
A healthy, normal person is like a miniature ecosystem of psychic energies. The subconscious usually takes care of maintaining balance, even if it is done by imposing stronger limitations. A generalist psychic removes these limitations through inner development one level at a time, always striving for a greater, more conscious state of balance. A psychic medium rather creates two psychic ecosystems within, and uses one to pull up the other. (Please note that the terminology I used is quite inadequate to describe these processes accurately.) In comparison, a person with a severe mental illness has psychic energies all jumbled up, sometimes even to the point of losing his or her identity.
Psychic mediumship is not advised for anyone but experienced psychics who have sturdy spiritual, mental, emotional and physical integrity, can use advanced channeling techniques and are well aware of the risks. If you're just starting out, it's much better to take it just one step at a time.