RSS -> Real Simple Syndication.
The best way to think of it, is there is a configuration file that you put into a program such as Google reader. The program then "knows" when the website has been updated, and can show you all/or a summary of the content.
Let's say you like to read the news, but you have maybe 10 sites you like, each giving a different type of story (entertainment, sports, etc). Instead of having to go to each site looking for updated content, you setup a RSS reader to pull down/alert you of updated content on the 10 sites.
By setting it up in google reader, then puttingit on your iGoogle page, you only load that one page, and it brings down the content for you.