Think of the terminal program (XTerm, etc) as similar to a command line in Windows. You can enter commands directly to the computer, rather than using menu items in a graphical user interface type program.

There are a host of commands you can issue, but the most common might be:

ls - list files in directory
pwd - show directory you are in
cp - copy files, as in cp oldfile newfile
rm - remove file
sudo gainroot - gain root privileges (see other threads on cautions for this)
tar - untar (uncompress) tar archived file

Each command usually also has a bunch of options, which you can usually see by entering just the command

HTH