mod_rewrite is an apache module, so firstly it needs to be installed on your server, normally it would be already.
If you have a look at phpinfo() for your site there's a list of installed modules, if it's not listed there you'd need to ask your host to turn it on.
It has loads of uses and works mostly like using regex (for adding bbcode or formatting urls, in news/forum scripts etc)
There's a nice page here http://httpd.apache.org/docs-2.0/misc/rewriteguide.html that has alot of info on the syntax, some usage examples etc, hopefully it should help 
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