What is a self-managed team?

I previously discussed a LinkedIn discussion thread about team's and various personalities. (Here's the LinkedIn discussion, and here's the prior blog post.) I focused on the personality aspect of the question, but Hemant came back with another question:

It is not yet clear what a self organising team really means / stands for.

Having spent some team managing teams, am yet to see a group of individuals so completely balanced that they choose the right approach without getting swayed away by a particularly persistent individual. [who in all probability is from the business side of things and insists on providing solutions instead of requirements].

Guess more efforts/reading is required on my part to understand this better..

This is a great question. I wonder how many people think that self-managed is focused on the roles of the team vs. the needs of the team from outer management? Here's my attempt to define a self-managed, self-organized team:

A self-organized, self-managed team is a team that needs little influence or direction from the organization above. The team itself becomes very good at working with the Product Owner/customer and knowing what to do next. There is little need for a project manager or resource manager on a day to day basis.

On some teams there are passive leaders, on others everyone plays an equal part. But the point is that they no longer need direct instruction/orders from above because they are more in tune with the customers needs. This allows the upper organization to be lighter (cheaper) and focus more on strategy instead of tactical issues.

What does self-organized and self-managed mean to you within the Agile domain?