so what extacly are bitcoins?
not an "extact" [sic] but an oversimplified description:
bitcoins are a form of cash you can use online. just like how the price of gallon of gas can fluctuate day to day, the price to acquire a bitcoin can fluctuate as well. this occurs because bitcoins are scarce, like gold is scarce.
when the price goes up that means there weren't enough people willing to give up their bitcoins at the lower price, so the price had to rise to make the thought of selling more attractive. sometimes it works the other way when there are more bitcoins for sale than customers, so the sellers drop their price to help unload their bitcoins.
what can you use them for, it is for buy stuff on other websites?
some people buy bitcoins simply because they want to buy something and bitcoin is either the simplest or only payment method available. others buy bitcoins to hold onto as an investment -- in hopes that the price will go up in the future and they can sell them at a profit.
others get bitcoins because they took bitcoins in exchange for a service or goods they sold. in most instances, they need dollars or similar after the sale for things like rent, food or gas. so they will generally be selling most of the bitcoins they take in. when you are buying bitcoins at an exchange, either the investors or these vendors are generally the ones who are selling their coins to you.
here's a list of places where bitcoins can be spent:
http://en.bitcoin.it/wiki/Tradehere's a list of other sites with more information:
https://bitcointalk.org/index.php?topic=15918.0
