RSS stands for "Really Simple Syndication." It's a protocol for simple XML output to make website updates available in a format other than "visual."
Say you like to follow many flying forums, blogs, news sites, etc. Rather than checking them one at a time, you can "aggregate" their feeds. If they all have an RSS "feed" URL, you can plug URL that into your RSS Aggregator application and have all the updates at your fingertips in one place. It might sound unnecessary at first, but once you start using it, it saves time and lets you check all your updates in one place.
For instance, I like to check occasionally to see if my Cessna 170 wiki site has been updated. Instead of going to the site, I just click a pull down in my bookmarks menubar and see the updates listed. Same for BCP threads, SC.org threads, CNN headlines, security releases for software. It makes what would normally be a time consuming and distracting process take only a few seconds. If I see something interesting, I can dig deeper.
Firefox is the most useful and accessible RSS Aggregator, and it uses the term "live bookmark." There are many other standalone applications that provide the same functionality, but it's nice to have it built right into the browser.