CVS is a program that helps multiple people work on the same code. You can checkout, update and commit back to a CVS server.
Checkout copies the current stuff from the server to your machine.
Update copies just the changes from the CVS server to your machine.
Commit takes any changes you've made and puts them on the server.
Its also remebers all the changes that have been made, who made them and why. So if anything goes wrong, or someone makes a bad commit you can roll back the changes. Also you can get a version of any file, from any point at time.
Its a very convient way for people to collabarate across the internet, without worrying about whos changing what all the time. Besides CVS, theres also BitKeeper, Subversion and others. They all do the same basic job.
The directories are there to help coordinate CVS.