BIOS is short for Basic Input/Output System.
When you turn on your computer, there is a small set of computer instructions called the BIOS that is accessed before anything else. This is entirely separate from the Operating System that a computer uses, eg Windows XP, etc.
The BIOS searches for hardware, like your hard disk, memory, (or RAM), monitor, keyboard and mouse etc, and it sets up your computer so that Windows can load and talk to all the hardware. You may see some of the results of its search on the first screens when you switch on. There are many types of BIOS and what they display will differ, but generally you will see information displayed about your Processor, RAM and hard disk.
The BIOS is programmable to a certain extent, but it is advisable to leave it as it is unless you have specific reasons for making changes. You enter the BIOS by pressing a certain key very soon after starting the computer, but which key depends on the make of computer you have.
A BIOS password can be set by you, but it depends on the reason you want to protect your computer. If you are storing highly classified material on it, then as has been said before, a BIOS password can easily be circumvented, or even reset. But if you simply want to protect it from family and friends, then a BIOS password may well be the best way.
Remember, if you do set a BIOS password, then forget the password, there is nothing you can do to bypass it or reset it, other than delving deep into the recesses of the computer itself. Capital letters and lower case letters make a difference, eg PASSWORD is different to password.