RSS is a standard format for syndicating content on the Internet. The content can be anything! Often information contained in an RSS feed is syndicated on other sites which expands its reach.
Website visitors love RSS because they choose which feeds they wish to subscribe to, if at any point they are unhapy with the content contained in the RSS feed they simply unsubscribe and no longer receive notification of feed updates.
RSS is really a win, win for both subscribers and publishers.
In order to get a better understanding of how RSS works download an RSS reader or use a web aggregator and subscribe to an RSS feed (they are usually indicated by a small orange icon).
The easiest way to create an RSS feed is to use software. The software I would recommend is FeedForAll (there is a Windows and a Mac version). There is a built-in wizard that will walk you through the process of creating a feed.
You can download an evaluation version from http://www.feedforall.com
If you prefer to create the feed by hand this website details how to hand code the RSS feed http://www.make-rss-feeds.com
If you want to display an RSS feed within your HTML website. The easiest/best way to do this is to use RSS2HTML a free PHP script. This means that you can retain the complete control of the HTML layout (using templates) and make it match your existing design. Additionally using PHP rather than JavaScript will mean that search engine spiders can "spider" the contents of the RSS feeds.
Additional details and a free rss2html download is available at: http://www.feedforall.com/more-php.htm
Additional information and other options for displaying RSS feeds can be found at: http://www.rss-specifications.com/displaying-rss-feeds.htm
Goodluck!