Twitter - what's it all about then?

I have spent the last few days in blatant self-promotion for Tickled Pink Crafts.  We have our own fan page on Facebook (thanks to Miss Tickled) and have joined Twitter.

I have successfully tweeted 74 times as I write this and am following lots of interesting people - mainly Mummy bloggers, crafty people and jewellery makers - but, and this is a big but...........I haven't got a clue what it's all about.  What's a "retweet" and how do I make comments on them?  What are all these words preceded by a #?  How do people find me?  Is it just for chatting?  Can I tweet anyone?  I am sure that I will get used to it in time, but if I am following you and I commit a Twitter faux-pas, please forgive me and chalk it up to inexperience.