In addition to the other responses, I'll try to answer your questions as closely as I can, Art. Although some of the answers might depend on how fluent you are with your coding knowledge.
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Originally Posted by Dirt Hammer
What is wordpress?
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Wordpress is what is known as a content management system which is commonly used as a blog publishing application.
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Originally Posted by Dirt Hammer
How does it work?
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One of the key features to point out is that Wordpress is Database Driven. What this means is that all the posts you write, settings you apply, members that register with your blog, etc. are all stored within a database (in WP's case, MySQL). And what WP does with all this data is that it retrieves the data dynamically and generates web pages through the PHP files stored on the server.
These are pretty much the basics of any CMS.
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Originally Posted by Dirt Hammer
Why would I need it for my site? What's the reason for having it?
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You don't NEED to use a CMS such as WP, you could manually write all the pages in individual HTML files and upload each one manually to the server, but once you start to create hundreds, even thousands of web pages, this task can begin to get quite tedious.
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Originally Posted by Dirt Hammer
What does it look like on my site?
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As others have mentioned, it doesn't exactly "look like anything" on your site. To create the front-end "design" of the blog, WP uses a feature that are referred to as "Themes". Each "theme" is basically a collection of XHTML and CSS files that are sliced up into various PHP sections (so you can get the header, footer, post template, etc. to create the look).
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Originally Posted by Dirt Hammer
It can't be blended into a page of my site?
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Yes it can. If I'm understanding correctly, you can develop your own WP theme and just model it to look like your main site. You could probably even get away with using the same stylesheet.
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Originally Posted by Dirt Hammer
thanks. does anybody have a site using wordpress that I can look at? Another question is will wordpress allow me to crate a community where people can post pictures and post blogs of there own?
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I also use WP to run most of my sites. However the best way to learn about it is download it from wordpress.org, install it on your server, play around with the admin section, and learn how the files are organized and structured that way.