For most of us, the most important feature of X is the window manager. This defines what kind of frame is put around each window, which buttons/keys perform what windowing function, and it also provides those pop-up menus that makes the mouse so useful. The window manager called ``fvwm2'' uses the file ~/.fvwm2rc, while other window managers (possibly including twm, mwm, olwm) are also used, and take initializing information from similarly named files (~/.twmrc, (~/.mwmrc, (~/.olwmrc). Fvwm2 allows for virtual windowing, whereby you can control several ``screens'' on a single monitor; very useful if you tend to run 12 windows at a time...
The most often used window is the xterm, which is a window for text; typing Unix commands, editing, etc. Other ``windows'' can include a digital clock, a word processor, netscape, a graphics program, or other software.