Define Arduino: http://en.wikipedia.org/wiki/Arduino
In short, it's an opensource circuit layout with an Atmel chip. Easy to program using a high-level arduino language using sketches (software is free) which looks a lot like Wiring/Processing/etc. It's setup to program/burn from a standard USB port. There are built in LEDs and the layout allows for *shields* to be mounted on top. A typical shield would use some ports (pass others through) and give your Arduino/circuit new functions like sensors, motor control, etc.
There are TONs of resources out there. Easy examples, walk-throughs, etc.