This question does not have a one sentence answer! If I just said that one uses this XML icon to get this site's RSS feed, you still won't understand. So let's try and answer this question in such a way that it all makes sense to you and, more importantly, that you learn how to benefit from it.
Let's say that you like my web site or this blog very much and you would like to read new content as I add it. At this stage there is no way of informing you when I've added a new page except for you checking back regularly. The other way is for you to bookmark my site or blog - but how many times do people really go back to a site?
What if I told you that you could have a little "window" (called a reader or an aggregator) on your monitor and that, each time I updated my site, you are automatically informed about it.
How, you may ask? A headline (called a news feed) and a short summary to inform/tease you is squirted to your reader. If the teaser interests you, all you need to do is follow the hyperlink that will take you to that page on my web site where you can read it all. If you're not interested, you simply delete the headline. The process is repeated each time I add new content.
You can of course subscribe to as many XML feeds as you want to - from current affairs to people's personal blogs like this one.
So, what must you do to set it up and how much is it going to cost?
Let's answer the second question first: Setting it up is FREE - it will cost you nothing.
This is how to setup a reader or an aggregator on a Windows system:
Download Microsoft's .NET framework Install this on you system.
Download RSSReader from here: http://www.rssreader.com/ Install this on you system.
You are now ready to add your first feed.
This is the feed to my web site http://www.perfect-party-ideas.com
Right-click on the orange XML icon. Click the "Copy Shortcut" option.
Open the RSSReader and click on the green "+ Add" icon in the top left hand corner.
A form opens up that prompts you to enter the URL of the feed. Just paste the URL here (ctrl-v).
Well done - you've just added your very first RSS feed.
Let's test if it is working.
Click the "Get" icon which is to the left of the "+Add" icon. You should see a number of feeds arriving in your reader. Simply double-click the ones you are interested in to read the summary. Click the "Read more" or "Open in a Browser" links if you want to read the whole article.
Was it that difficult? No, I agree, it's fairly straight forward.
Now you are ready to sign up for more feeds. Why not sign up for my blog's feed as well? Just copy and paste this URL exactly as you did the previous one:
http://perfect-party-ideas.blogspot.com/atom.xml
Congratulations - you have entered the exciting world of RSS!