I've heard the terms OVA and OAV used interchangeably with one another, but is there a distinct difference between the two?
Do the definitions differ in Japan versus overseas? Where did the two acronyms originate?
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OVA and OAV are synonymous. The reason for having two acronyms is historical; currently, both Japan and English-speaking countries use "OVA" as the official designation.
According to the Japanese Wikipedia (rough translation):
In the early days, "OAV" (short for "original animation video") was often used as well, but "AV" and "Adult Video" were easily confused, and could be easily mistaken for "Audio/Visual", so it gradually became less common.
The English Wikipedia sums this up slightly more succinctly:
Original video animation, abbreviated as OVA media (and sometimes as OAV, original animated video, by English-speakers, though it was mistaken for "Original Adult Video"), are animated films and series made specially for release in home-video formats.
Basically, the media was initially dubbed "OAV" for "original animated video". However, because of the term "adult video" (which implies pornography or mature material), and the ability to be easily confused with the common film/animation term "audio/visual", the last two letters were switched to form OVA (original video animation).
A pretty late answer, but I found a comment from Yoshiharu Tokugi (famous for writing Dirty Pair, Macross and Power Rangers) in Johnathan Clement's "Anime: A History".
Tokugi claims there is a slight distinction between the terms:
OVA "is an industrial term, introduced at the production level to differenciate between anime produced for film or television, and those works that are intended to go 'straight to video' "
OAV is a "marketing term, introduced at the level of distribution to make it clear that the object in question was not simply a repurposed work from film or television"
[Quoted from the book, rather than Tokugi directly]
So it seems to be at some stage the terms were used to indicate that a show was not being televised/filmed (OVA) and to indicate a work that was not a recap, enhanced version, etc (OAV). So technically, a work could be both, or neither.
The terms have become homogeneous now though, probably due to the subtleties between the terms and the likeness of the acronyms. So it is safe to assume that an OVA/OAV will refer to a straight-to-video-release.