In-lens image stabilization, also known as optical image stabilization, is implemented in the lens itself and moves the lens elements in an attempt to counteract the sensed motion of the camera.
Modest image stabilization systems can degrade image quality if the photographer is intentionally panning (as the system tries to negate the panning motion), or if the camera is mounted on a very sturdy tripod (the system drifts around slowly due to spurious measurements over the course of a long exposure).