OpenID is a solution for the log-in problem of having multiple identities online. With OpenID, you create one master identity online at a site that you use a lot and tend to remain logged in to--for instance, a social network site or your personal blog. When you need to identify yourself to another new site, you point that site toward your main identity-providing site where you're already logged in. Your main site sends the new site your log-in credentials, so the new site now knows who you are.
In theory, if OpenID was adopted on every Web site around the Web, you'd need only one universal log-in and could forgo the often tedious practice of remembering user names and passwords.