One of my pet hates is when people in the media use the term 'schizophrenic' to describe a situation that has two sides to it, or has a 'split personality'. It really really annoys me because it perpetuates the myth that Schizophrenia has something to do with having multiple personalities, which it really doesn't. It drives me mad! They should at least get their facts right if they're going to trivialise something so serious. Half wits!

But anyway, here are my thoughts...
Depression:
Can mean very different things to different people! Some people say they are depressed when they are just a bit down. People who have severe depression find it difficult to see the point to life and don't just get over it in a few days. They need a lot of support, understanding and sometimes medication (although I think that should be an absolute last resort). It can be very upsetting and frustrating for those around them.
Psychosis:
Symptoms that involve a break with reality in some way (e.g. hearing voices or having delusions). It can be very very scary, especially if the delusion is threatening. Some people learn to live with their psychosis, or even enjoy it sometimes if it's a non threatening delusion. The severity and type of psychosis would determine whether or not the person wishes to, or is able to function without medication.
Stress:
Again, means different things to different people. Everyone experiences stress every day and some stress is good for us, but if it's sustained and not handled well it can become something more serious.
Schizophrenia:
A label given to people who are experiencing a collection of psychotic symptoms. Schizophrenia can be controlled with medication which enables people to get on with life - not much different from someone having a physical problem controlled with medication, but it depends on the type and severity of the symptoms.
Psychiatric Hospitals:
Necessary evil. Not always the best place for a sick person to be but at the moment they seem to be the only place available.