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The Expanded Universe (or EU for short) is a collection of fictional background material from the Star Wars universe that is derived from official novels, comic books, and various other media besides the movies themselves. The Expanded Universe is considered canonical by Lucasfilm Ltd., though there are many fans of the movie series who do not agree. The Expanded Universe, however, has a continuity with few wrinkles. The general rule is that nothing in the Expanded Universe is allowed to contradict any other part of the Expanded Universe or the films. The films, however, do slightly contradict the Expanded Universe on occasion, and retcons are created in the Expanded Universe to fix these contradictions.
The earlist works involving Star Wars chronologically are the Tales of the Jedi comics series, which is set millennia before the films are. The most recent is the New Jedi Order, which is set about twenty years after Return of the Jedi.
The Expanded Universe is actually older than the Star Wars movies themselves. It started in 1976 when the novelization of Star Wars hit book stands before the movie was released in theatres. The novelization was ghost written by Alan Dean Foster. Since Foster was writing the book before the final cuts had been made to it, there were several scenes that he wrote for the book that would not appear in the film thus expanding the Star Wars Universe.
The early years of the Expanded Universe where sporadic and unrefined because there was very little for the authors to go on. The first EU novel to not be an adaptation of the films was Splinter of the Minds Eye by Alan Dean Foster, drew inspiration largely from one of the original drafts of Star Wars. Many of the books and comics from the '80s made many analogies to our reality, and thus seem rather detached from the rest of the EU, despite the fact that they don't contradict any other sources. It wasn't until West End Games started publishing material for the Star Wars roleplaying game that the EU really began to be fleshed out.
The EU was by and large not very successful in its early years. Many readers were turned off by the lack of stories' connections to other stories. It wasn't until Timothy Zahn wrote Heir to the Empire in the early '90s that it really began to catch on. Heir to the Empire was the first book in Zahn's Thrawn Trilogy and it sparked a revolution in Star Wars literature. After Zahn followed numerous Star Wars novels, most being well received.
It was decided at one point that using the Empire as the villains over and over again was getting old. Hence a new threat, the Yuuzhan Vong, was introduced in the New Jedi Order. The prequels also brought a range of new possibilities. Since The Phantom Menace was set in a time of peace, it was hard to invent any kind threat for the heroes to fight aganist. Thus most material that built on The Phantom Menace was either set before or during the film, rather than after. Attack of the Clones, on the other hand, introduced another fresh conflict -- one which fans had wanted to see for over twenty years. Aside from being explorded in comics and novels, the Clone Wars would be given their own cartoon series.
It seems that elements of the Expanded Universe influenced George Lucas in the writing of the Star War prequels, at least insofar as knowledge of the EU helps in understanding the prequels. For example, in episodes 4-6, the concept of Darth Vader being the "Dark Lord of the Sith", or the Emperor being called "Palpatine" are not really explained on screen. The EU concepts that were developed however seem to have been adopted by Lucas in his newer movies. In fact, in Attack of the Clones there is a Jedi character, Aayla Secura, who was made for use in the Star Wars comic book. Lucas liked the way the character looked so much that he had a costume of the character made for the movie. The Clone Wars-era EU was also used to introduce characters such as General Grievous and Commander Bly; Lucas' creations slated to appear in Star Wars Episode III: Revenge of the Sith.
Nom Anor | Garm Bel Iblis | Joruus C'baoth | Kyp Durron | Borsk Fey'lya | Ghent | Talon Karrde | Exar Kun | Tsavong Lah | Gilad Pellaeon | Rukh | Mara Jade | Ben Skywalker | Luuke Skywalker | Anakin Solo | Jacen Solo | Jaina Solo | Grand Admiral Thrawn | Ulic Qel Droma | Vergere | Winter | Prince Xizor
Bakura | Cardia | Corellia | Dantooine | Kashyyyk | Kessel | Korriban | Mon Calamari | Myrkr | Ord Mantell | Rhen Var | Wayland
This is a hotly debated issue among Star Wars fans. Basically, the allure of the films is that they are organised numerically and logically whereas the Expanded Universe is published out of chronological sequence and occasionally contains minor contradictions, despite the best efforts of Lucas Licensing. On the other hand, without the Expanded Universe, the Star Wars universe has no real depth. Some people find though that the Expanded Universe convention destroys many of the good dramatic elements of the movies if it explains things in a way they find unfavorable. These critics feel that writing a new story within the context of the EU handcuffs the author.
Though LFL has decreed that the Expanded Universe is canon, many Star Wars fans do not agree. In theory, the films are the most canon and everything else official is part of the Expanded Universe that, while canon, cannot contradict anything in the movies. Despite the unpopularity of works like the Jedi Prince series, they are considered just as canonical as popular works like Shadows of the Empire.
On top of this, there are minor disputes about what is, and is not, part of the Expanded Universe. For example, The Ewok Adventures was written by George Lucas and is a film, but it not one of the six films of the series, so it is usually considered to be a part of the Expanded Universe.