RSS = Really Simple Syndication. Basically a clever way of being able to view the content of several web sites (anything you subscribe to) in one place without having to tit on visiting each site individually. You do this in a program known as a feed reader. RSS is useful for delivering new content out to your readers and drawing them back for a return visit. Read more on Wiki.
rss is another form of blog/website content, like gr8liverpoolfan said u can use feedburner to make your own feed. You can use 'flare', one of optimize facilities. In short flare is footnote add on of your content to show link to digg, technorati etc. Bring user friendly to your rss.
How does it work: 1) You add a button on your blog 2) People click on this button 3) They see your latest blog post in their RSS reader 4) If your post is interesting, they click on the title to read it Easy like 1,2,3 You can also use a service like feedburner.com