There are alot of terms which are used in greek Life, here are some of the most common ones. You might also try this website for a more complete list. .
http://www.sjsu.edu/orgs/beta_theta_...tion/terms.htm
Rush: the period at your campus when you can offically accept bids from greek organizations.
Rushee: Someone who is interested in the greek system, but is not yet committed to one organization.
Pledge: a prospective member
Fraternity/Sorority Badge: ornamental pins worn by intiated members.
Pledge Pin: recieved upon becoming an offical pledge to show your status to not only the organization but around campus.
Brother/Sister: An Intiated member
Big Brother/Sister: your mentor while pledging
Little Brother/Sister: term for the one who has a Big
Families: Your "lineage" from your big, to thier big, and so on. This also includes any addition little brothers or sisters that those people may have had
Paddles: Often given to pledges to collect signatures of members, and sometimes used for hazing purposes by fraternities.
Rituals: Since fraternities and sororities are organizations that are centered around inclusion and friendship, the use of secrets, symbols, and passwords are used to identify members from non-members. These secrets are revealed in rituals.
Handshake & Password: Known only by intiated members, a way of identifying other members of your fraternity or sorority,whether it be in college or years after.
Hellweek: also known as Inspiration Week, the time when your pledging is almost done and it intensifies. There are quite often rituals involved.
Brotherhood/Sisterhood: a term used by outsiders to try and take away from the greek system, but is something that one can only feel once they have been intiated.
In answer to your other question, yes a good majority of fraternities and sororities do have some sort of a final test of knowledge prior to being intiated. These can sometimes be oral or written. This part solely depends upon the organization and the local chapter.