An Internet Protocol Address is a unique identifier for machines on a network, including, obviously, the Internet. IP addresses consist of four numbers, called octets, separated by dots. These numbers are called octets because they are represented by a series of eight binary digits. When written in decimal notation, that gives us a range of 0 through 255. E.g., 192.168.0.255.
IP addresses are what the various servers and routers across the Internet use to send information to each other, as opposed to human readable names like Yahoo.com. For instance, when you point your browser to http://www.yahoo.com, behind the scenes, your browser converts the name to the appropriate number and proceeds to connect you. (This is accomplished via DNS, which is like a phone book that links names with IP’s.)
The following IP ranges are reserved for private use. This means that they can be used on your own network but not on the Internet. Any information you try to send across the Internet to one of these addresses, will simply be dropped by the first router that sees it.
10.0.0.0 through 10.255.255.255
172.16.0.0 through 172.31.0.0
192.168.0.0 through 192.168.255.0
If you’re using a router at home, it probably gave your computer an IP address somewhere in the 192.168.x.x range. On Windows, you can see what your IP address is by opening a command prompt and entering the command ipconfig. On Unix try ifconfig from a terminal.
Since a 192.168.x.x address is not routable on the Internet, your computer can not connect directly, so it gets some help from your home router via Network Address Translation (see Further Reading below).
Another range of note is the loopback range, 127.x.x.x, of which the most commonly used IP is 127.0.0.1. This is used by a machine to send info to itself. It is most commonly used for testing purposes.
IP Address – Wikipedia
What is an IP address? – HowStuffWorks.com
How Domain Name Servers Work (DNS) – HowStufWorks.com
How Network Address Translation Works – HowStuffWorks.com