Thank you, Chuck!
My current understanding of forgiveness is that it is a specific class of love. For i know that of all i say, think and do, only some of these acts are loving as Jesus Himself loves.
Some acts are neither loving nor unloving, such as sleeping and eating. Other acts are unloving and sinful and those of which i must immediately confess and repent. These unloving and neutral acts are represented as the black ellipse in the image that follows.
Some acts are loving as Jesus loves. Not all these acts can be rightly said to be merciful or forgiving, however, for not everyone i love has done something wrong for which i am aware i should forgive them. These acts are represented as the red ellipse in the following image.
Some acts constitute showing mercy, for although some ways of loving as Jesus loves are not examples of mercy, some other ways of loving as Jesus loves are merciful. Another way of putting it is that all mercy is love, but not all love is mercy. Illustrations of these might be giving to the poor or showing leniency to someone who has sinned against me or being ready to forgive someone (these are all definitions of mercy that can be found in most dictionaries). These are represented as the yellow ellipse.
Forgiveness, as you might guess, is a specific class (or kind) of mercy. For just as all mercy is love but not all love is mercy, so too all forgiveness is mercy, but not all mercy is forgiveness. Forgiveness is taking mercy a step further by granting a full pardon to the person who has sinned (for to pardon and cancel a debt are definitions of forgiveness in most dictionaries). It is a more beautiful and complete and desirable type of mercy. While mercy is loving the unlovable by meeting their needs, being lenient, and being ready to forgive, forgiveness takes this a step further by actually forgiving (or pardoning) a person for his sin. It is cancelling the debt the person owes. It results in a restoration or establishment of a closer relationship with the person. It results in restoring or establishing trust in that person. An example might be a priest who molests a child, who is finally forgiven by the child after the priest repents, goes through years of counseling, apologizes to the one he violated and makes a sincere and public commitment to God and to the child and to others to never commit the sin again.
One might say it often (though certainly not always) takes two to forgive, for the one forgiven often must repent of his sin, and prove he has repented by his words and deeds, before he should be forgiven. This is how God the Father forgives; this is how we should love like Him in the way we forgive others.
http://www.geocities.com/chris4dayspring/love_mercy_forgiveness.jpg