This article relates to WordPress 3.0. Much of the code posted here won't work on previous versions and some of the information may change in newer versions.
WordPress already comes with five different content types built into the system.
This is the standard content type and is generally the most used in a blog install. Posts tend to be aggregated onto pages but this is not always the case.
This is a static content type and is used to display non-aggregated pages.
Every time you upload a file through WordPress it will store a record of it in this area. You can see this list of files by going to the Media menu item in your admin area. This is what is used when you click on the Media Libray tab on the Add and Image dialog in the edit post screen.