Gelatin itself is made of a protein. (Proteins are solids at most temperatures.) When you mix the jello powder into the hot water, the protein actually disolves in the water. But like many things, it's harder for the protein to stay disolved in cold water than in hot water. So as the solution cools down, the protein comes out of solution and turns back into a solid. But it doesn't just form a solid that settles onto the bottom, like a mixture of water and sand would.
As the protein molecules come out of solution, they stick to each other. When they stick to each other, they form a complicated matrix that runs all through the jello. You can think of it as a giant mixed-up jungle gym of little protein molecules all sticking together. They water molecules get caught up inside this matrix so they can't just drain out.
So all things said and done, jello is basically a solid suspended in a liquid. The scientific word for this is a 'colloid'. If you heat it up enough, the solid will become disolved again it will become a liquid all through. But if you cool it down enough, the liquid water will freeze and it will become a solid all through.
--thanks google
