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A mujahid is literally someone who takes part in jihad. Usually mistranslated as someone who takes part in war but is actually someone who is facing any kind of a struggle for the purpose of uphold and or benefiting Islam and or Muslims.

Our beloved prophet, peace be upon him said something to the effect of:

The closest people to Allah are the various prophets, and then my companions, and then the shuhadah.

It is, therefore, desirable to die when involved in some form of jihad. This would make you a shaheed.

Bad example:
Here in America, Afghanistan’s Northern Alliance are also called mujahideen. In Afghanistan they are known as rapists, murderers and tyrants. Since they are committing these actions while involved in their so called jihad, it is quite obvious they they are not mujahideen.

Good example:
After the World Trade Center incident New York is in chaos. A mob of people chase Samantha, a newly converted Muslim woman into a school building. The mob waits outside. The people in the building want her out, they tell her to take off her headscarf and walk out like a normal American. Samantha refuses and walks out with her hijab on. The mob hospitalizes her. Samantha is a mujahid.

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