So, what is this and how does it work?
RSS stands for Really Simple Syndication. In short, it's a way for websites you enjoy to let you know of updates.
If you clicked on the icon above in some browsers, you might've seen a messy looking bunch of code that looked kind of like html. Other browsers, such as Firefox and IE7, will automatically detect it as an RSS feed and allow you to subscribe to it using their built-in readers. You can subscribe to RSS feeds using any of a number of special readers called aggregators. They can be web-based, browser-based, or entirely separate programs.
I like to use a separate, Windows-based program called SharpReader, which minimizes to the system tray and displays a little pop-up in the corner whenever a new item appears in a feed I'm subscribed to. However, there are dozens of options for readers out there, and there are thousands of sites out there which now utilize RSS feeds to send out news and updates. If you don't already subscribe to RSS feeds, it's well worth your time to learn how they work and utilize them.
If you want to read more about syndication on the Internet, this site has a lot of good information.