Rooting is the Android equivalent to jailbreaking on Android. The Android OS already operates from giving users a ton of freedom, so the effects may not appear to be as drastic as jailbreaking on iOS. The main point of rooting is to give full access to modifying all the files in the Android OS, comparable to the "Run as Administrator" command in Windows. Rooted Android OS allows you to backup data that was otherwise impossible, as well as install certain applications like AdFree (to block ads) that will require a modification of an OS file. You can also get certain skins for Android through rooting that would not be possible otherwise.
The rooting process is different for every Android device, though most if not all can be rooted one way or another. You'll have to search up the process for your own device, as the steps and programs needed vary. Some phones can be rooted through SuperOneClick (a convenient app that automates the rooting process); others like those on Gingerbread may be able to rooted through GingerBreak. In certain cases, a more complex method must be utilized.
There are temp-roots, which temporarily roots your phone until the next reboot (if I'm not mistaken), as well as permanent roots, which will make the root stick. It is like the tethered and untethered jailbreaks for iOS. It is possible to un-root your phone with a simple process.
