ID3 is a metadata container most often used in conjunction with the MP3 audio file format. It allows information such as the title, artist, album, track number, and other information about the file to be stored in the file itself.
Tagging MP3's and other audio files is very important when it come to reading them in devices such as IPod's, and Android based systems, and other media players. Although most all players will still play your MP3's untagged they will not have access to display the artist, album info, or track listings, as most will show an untagged audio file as "Unknown Artist"
Most CD Rippers such as Windows Media Player will automatically tag the MP3's as they are ripped, as long as they are able to access this info online, which most do automatically by simply reading to CD, and matching the content from their music data bases.
However, those who rip to MP3 either by LP, radio, or any other non CD (digital) source, will wind up with a compilation of untagged MP3's, that will have no certain playback order, or artist information to read in these media players.
These media files will then have to be manually tagged, which is simple to do.
Below is the details information on an MP3 that can be viewed, and edited by clicking on it's "Properties". (right click on the MP3)

These 4 boxes must be filled out correctly and spelling
must be exact for Artist and Album name for each MP3 that is part of the same Album, or they will not store in the same folder on the playing device to be played consecutively.
Here is a full version that is free of a program called
ID3-TagIT that will make your job much easier if you have several batches to tag.
It can be downloaded here:
http://download.cnet.com/ID3-TagIT/3000 ... 44467.html(Be sure to
decline all the free software that will be offered at the beginning of this install, it's the way they keep it free)
It's very simple to use and will save a lot of time if you have several albums that need tagged.
ID3-TagIT 
To read and understand more on ID3 Tags and it's history and purpose look here:
http://en.wikipedia.org/wiki/ID3