Sitemaps, as the name implies, are just a map of your site - i.e. on one single page you show the structure of your site. Sitemaps make navigating your site easier. Sitemaps have always been a part of good Web design practices but with the adoption of sitemaps by search engines, now they have become even more important.
Using sitemaps has many benefits, like easier navigation and better visibility by search engines. Sitemaps offer the opportunity to inform search engines immediately about any changes on your site. If your site is new, or if you have a significant number of new pages, then using a sitemap can be vital to your sucess.
Google Sitmaps uses a special XML format that is different from the ordinary html sitemap which is very important from SEO point of view. One might ask why two sitemaps are necessary. The answer is obvious - one is for humans, the other is for spiders.