A USB hub is a device that basically has one USB connector for computer (or another hub), and multiple connectors to which devices are plugged in. They can be separate devices (often with 4 or 8 ports), or integrated to monitors and keyboards.
Typically, USB hub uses an "AB" cable (that is, one that has a rectangular plug on one end that goes to the hub, and a "flat" connector on the other end that's connected to computer or other hub).
The "hub" that's on the back of the computer is often known as the "root hub". At the moment, USB bus can only have one root hub (read: you can't make a network between two or more machines with USB - please stick with Ethernet or something until USB evolves into that insane direction). Some systems require that if you're using a USB keyboard, it must be connected to the root hub.
These things are very good if you need to connect more USB devices than you have ports for on your machine. A USB bus may have up to 127 devices connected.