In the liver, the enzyme alcohol dehydrogenase converts ethanol into acetaldehyde:
C2H5OH + NAD+ --> CH3CHO + NADH + H+
(NAD [nicotinamide adenine dinucleotide] is an important cell coenzyme. NADH is the reduced form, and NAD+ is the oxidized form.)
Humans have at least six slightly different alcohol dehydrogenases. The version of alcohol dehydrogenase in women is less effective than that in men, which is part of the reason that women have a lower tolerance for alcohol than men do.
Acetaldehyde (CH3CHO), also known as ethanal, is a highly reactive flammable liquid with a strong fruity smell. It boils at 70º. It occurs naturally in ripe fruit and coffee, and is produced by plants as part of their normal metabolism. When exposed to acetaldehyde vapors, humans develop irritation of the eyes, skin and respiratory tract. Acetaldehyde is an air pollutant emitted by cars and certain production facilities. It is also found in tobacco smoke. It's classified as a probable carcinogen. It's more toxic than ethanol and is responsible for many hangover symptoms.
The acetaldehyde is converted by acetaldehyde dehydrogenase into acetic acid, which is harmless. (The drug Antabuse [tetraethylthiuram disulfide], used in the treatment of certain alcoholics, prevents the oxidation of acetaldehyde to acetic acid.)
Acetic acid (CH3COOH), also known as ethanoic acid, is produced naturally as fruits spoil. It freezes at 62º. Vinegar is usually 4-8% acetic acid by volume.