Say you have a program that take 30 minutes to run (it's doing something MIGHTY intensive!)
You run it in the foreground, you'll sit there waiting at your terminal until it's done before your prompt comes back and you can interact with the OS again.
In the background, your prompt will come back immediately and you can interact  with the OS [/edit] while this CPU-hog program is running "in the background". You cannot easily interact with the backgrounded program, so it should be programmed operate on it's own without user input.
Of course, you could always just open up a new terminal window, but the above explains what will happen if you're limiting yourself to only one terminal session.
Last edited by haertig; 01-20-2006 at 03:13 PM.