RSS stands for Really Simple Syndication. RSS is a tool that helps you get current information from a website without having to actually visit the website. Each time the site is updated with a new posting, you will receive notification and details of the new information through your RSS subscriptions, which can be sent via email or sent to a personalized RSS page/reader. For example, without RSS, you would need to visit your favorite blog every few days to check to see if any new blog entries have been posted. With RSS, you will be notified through RSS emails or through your RSS site each time the blog is updated. It’s efficient and convenient.

RSS consists of a few components. The first is the feed which is created by the website owner. Website owners add feeds to their site and then advertise them with subscribe links or this icon.

The person gathering or aggregating the feed needs a reader or aggregator to collect the feeds. I like Google Reader and the RSS Reader in Outlook 2007.
You can watch this great Common Craft video to see RSS illustrated.