A single activity can include elements of both aerobic and anaerobic exercise. For example, interval training, where you alternate cycles of low-intensity (aerobic) and high-intensity (anaerobic) work during the same workout, has elements of both. So does a game of tennis where you might sprint at one moment (anaerobic) and then move less aggressively for several minutes (aerobic) as you hit ground strokes from the baseline.
Most activities can be performed aerobically or anaerobically. For example, you could walk briskly on the treadmill at 3.5 miles per hour and feel warm and slightly out of breath (aerobic), or you could walk very briskly at 4.5 miles per hour and feel very out of breath (anaerobic). The same is true for biking, swimming, dancing, or virtually any other activity. The intensity of the workout determines whether an activity is aerobic or anaerobic, and all you need to do is pace yourself to elicit the type of training you desire.
Breathing increases during aerobic exercise to bring oxygen into your body. Once inside your body the oxygen is (1) processed by the lungs, (2) transferred to the bloodstream where it is carried by red blood cells to the heart, and then (3) pumped by the heart to the exercising muscles via the circulatory system, where it is used by the muscle to produce energy.
"Oxygen consumption" describes the process of muscles extracting, or consuming, oxygen from the blood. Conditioned individuals have higher levels of oxygen consumption than deconditioned individuals ("couch potatoes") due to biological changes in the muscles from chronic exercise training. For example, a deconditioned individual might have a maximal oxygen consumption of 35 milliliters (ml) of oxygen per kilogram of body weight per minute (ml/kg/min), whereas an elite athlete may have a maximal oxygen consumption up to 92 ml/kg/min! Values like this are expressed as VO2 (volume of oxygen consumed) and can be measured with special equipment in a laboratory.
A higher percentage of fat is burned during aerobic exercise than during anaerobic exercise. Here's why. Fat is denser than carbohydrate (fat has nine calories per gram and carbohydrate has four), and so it takes more oxygen to burn it. During aerobic exercise, more oxygen is delivered to the muscles than during anaerobic exercise, and so it follows that a higher percentage of fat is burned during aerobic exercise when more oxygen is available. When less oxygen is present, like during anaerobic exercise, a higher percentage of carbohydrate is burned.
Keep in mind that both fuels are almost always burned simultaneously, except during the most intense, short-term bursts of energy, like sprinting and weightlifting. It's the percentage of fat and carbohydrate burned that changes during a workout depending on the intensity, but you almost never burn just one exclusively. You burn fat while you're at rest, and you burn it during virtually every moment of exercise. It's a myth to think that it takes 20-30 minutes of exercise before your muscles start burning fat.