Like the guitar and bass the banjo is also a transposing instrument; it's still written in the key of C but every note is written one octave higher than it sounds. The banjo is not a overly common instrument in jazz or contemporary music (and probably will never be in a classical ensemble) but there are few genres where you will encounter it especially since it has seen a small rise in popularity in recent years (for example Bela Fleck and the Flecktones)
The 5 string banjo is probably the most common variation of the instrument and is most common in bluegrass, folk, country and some jazz music. What differentiates this banjo from a tenor (below) is the addition of the 5th "thumb string" that is more of a percussive tool tuned to one static note and not usually fretted.
The tenor banjo is a slightly shorter 4 string version of the banjo that was common in early swing and jazz music before the introduction of the guitar to the genre. Still used today in a variety of styles and most banjo players are capable of doubling on either version of the instrument.