Right ill try and explain this as easy as possible. A Ip adress is a unique adress that every single person has. (If you share a wireless network more people will have the same IP adress) You can figure someones location out with a IP adress. For example Mine starts with 81. ect this indecates i orginate from England. Ip adress's are in the format of 00.00.00.00. Servers have IP adress's this is how it is possible to connect to certain servers.
Ummm - i think thats everything about a IP adress. Oh and dont tell anyone your IP adress as some hacks require them to know your IP adress. If they know your IP adress they basicly have a key to your house.