Local variables are declared within methods, constructors, or blocks and only visible within those scopes. They are stored on the stack and have no default value. Instance variables are declared within a class but outside of methods and hold object state visible throughout the class. They are stored on the heap and have default values of null, 0, or false. Class/static variables are associated with the class, not object instances, and can be accessed before object creation. The presentation discusses the different types of variables in Java including local, instance, and class variables as well as their scopes, memory locations, default values, and examples.