What does it mean to say that a particular statute is “retroactive” in application?

Question 1: What does it mean to say that a particular statute is “retroactive” in application?
Question 2: State courts often have been more inclined than federal courts to invalidate a statute because it applied retroactively. What is the standard or approach principally used by the federal courts when the constitutionality of a retroactive federal statute is challenged under the Due Process Component of the Fifth Amendment?
Question 3: In your estimation how should courts resolve retroactive challenges to statutes? For example, should retroactivity always be prohibited? Never prohibited? Permitted but only for a fixed period of time (if so, what period)? Permitted only in certain situations (if so, what situations)? Give reasons for your preference.

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