The Jawas are a race of small (generally 1 meter or less) bipedal aliens who are (as far as anyone knows) one of the three sentient races native to the planet Tatooine- that magical nowhere where so much seems to happen in the Star Wars universe. Jawas wear filthy brown robes, often festooned with pouches and belts. They are entirely covered by their clothing, presumably as a guard against the desert dust and wind. Only their shining yellow eyes are visible.
The Jawas survive by scavenging and trading. Though they lack anything that might be termed education, they have an intuitive knack for understanding and repairing technology. They sell droids and other equipment to Tatooine's population of human mosture farmers, which they acquire by scouring the desert for wrecks and junkyards, or by stealing it from other people. Jawas have very loose understandings of the concept of ownership, and are not averse to stealing something only to sell it back to the original owner. They sometimes kidnap droids by disabling them using specially fitted blasters that temporarily disrupt the droid's circuitry (a sort of robot tazer called an ion gun in the Star Wars universe).
Jawas live in gigantic communal dwellings housed inside giant tracked vehicles called sandcrawlers. Sandcrawlers are alleged in some sources to be abandoned mining machines brought to Tatooine as part of a failed mining scheme by colonists (a tip of the hat to Dune, perhaps?). They are often described as dirty and smelly, and don't seem to be particularly well liked by those who have to deal with them. Their affinity for technology borders on the obsessive- they paw and fawn over any new device that comes their way (like Luke's landspeeder in A New Hope). They speak a highly variable trade language that some non-Jawa are able to understand well enough to conduct business. However, if they wish not to be understood, they can speak entirely incomprehensibly.
Jawas do not play a particularly large part in the Star Wars universe. A group of them sell R2-D2 and C3PO to Owen Lars, and are later slaughtered by Storm Troopers. They often show up in the background of scenes set in Mos Eisley or Jabba's palace. Nonetheless, the Jawa has become a popular icon of the Star Wars world, for some reason. They are parodied in Mel Brooks' Space Balls, and have emerged as somewhat popular among the geek set, as tech-oriented action figure mascots and the like.
The Jawas do not seem to have fought on behalf of the Rebel Alliance or The Empire during the galactic civil war. It isn't clear that either side would have had them, had they wanted to contribute in some way. Given the prevalence of midget actors in the Star Wars series, more than one person has asked the obvious question: Are there ewoks under those robes? The world may never know.
Sources: A variety of non-canonical Star Wars literature, including the old West End RPG, and various books and magazines.