Common Answer #1: Ale is made with top-fermenting yeast, but lager is made with bottom-fermenting yeast.
This answer is misleading at best and simply not true. Observe an active fermentation for any length of time and you immediately notice that yeast activity is distributed throughout the liquid. As billions of yeast cells multiply and feed upon the available sugars, initially clear wort becomes rather cloudy. Bubbles rise to the top from all points in the fermentor, and the whole mass appears to churn violently. When fermentation is over, those yeast cells drop out of solution, and the beer becomes clear once again. Most yeast cells, ale and lager alike, flocculate and end up on the bottom of the fermentation vessel, at least to some degree.