Shane, it's not your fault that you're confused.
Lambert is an illumination model (with a physical basis) for the light reflected off a surface, expressed in terms of the incoming illumination's direction with respect to the surface normal at the point of incidence.
Phong is a more nuanced shading model (albeit a more hacky one) which says that light is composed of ambient + diffuse + specular components. It treats the ambient component as constant everywhere (hack!), the diffuse component using the Lambertian model above, and the specular component using a power-law falloff (which is a clever hack, roughly approximating actual BRDFs).
The word "Phong" is also an interpolation method (when used in the context of modern triangle-based rendering pipelines). When computing the illumination at a pixel in the interior of a triangle, you have two choices:
Gouraud shading: Compute the color at the three vertices and interpolate in the interior, using barycentric coordinates, or
Phong shading: Using the normal at the three vertices, interpolate the normal in the interior and compute the shading using this interpolated normal at each pixel.
This is why (as @RayToal pointed out), if your specular "highlight" falls in the interior of a triangle, none of the vertices will be bright, but Phong shading will interpolate the normal and there will be a bright spot in the interior of your rendered triangle.
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