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The "root" account is the most privileged account on a Unix system. This account gives you the ability to carry out all facets of system administration, including adding accounts, changing user passwords, examining log files, installing software, etc.
When using this account it is crucial to be as careful as possible. The "root" account has no security restrictions imposed upon it. This means it is easy to perform administrative duties without hassle. However, the system assumes you know what you are doing, and will do exactly what you request -- no questions asked. Therefore it is easy, with a mistyped command, to wipe out crucial system files.
When you are signed in as, or acting as "root", the shell prompt displays '#' as the last character (if you are using bash). This is to serve as a warning to you of the absolute power of this account.
The rule of thumb is, never sign in as "root" unless absolutely necessary. While "root", type commands carefully and double-check them before pressing return. Sign off from the "root" account as soon as you have accomplished the task you signed on for. Finally, (as with any account but especially important with this one), keep the password secure!