Each site can have one or more layouts. The layout is where the user will add common blocks of content to be used on all or many of the site's pages.
On sites where the home page is laid out differently than the inside pages, one layout can be defined for the home page, and a second layout can be defined for all other pages (for the "inside" pages).
On sites where the home page has the same layout as the inside pages, then only one layout will be needed for the entire site (for all pages).
The masthead, logo, navigation, and other common blocks of content will go in a layout.
The layouts are divided into four segments: top, left, right, and bottom segments. Whatever blocks of content are put in the top segment of the layout will be displayed first on all related pages (e.g. masthead, main navigation), and whatever blocks of content are put in the bottom segment of the layout (e.g. text links, copyright statements) will be displayed last on all related pages.
All segments within a layout are optional, but it is recommended to at least put something into the top and bottom segments. Sometimes the site's main navigation (the "nav" block) is put into the top segment of you want horizontal navigation links. Other times the site's main navigation is put into the left or right blocks to generate vertical navigation links. It's all customizable. Of course, if you move your navigation links to a different segment after your site has been launched, you might need to also adjust your CSS code to tell your site how the navigation links should work in their new segement.
When a new page is added to a site, you will be asked which layout to use for the new page. The layouts that have been created on your site will be displayed in a dropdown list. There is usually one layout called "* Default" which you should usually selected, unless you are working on a page which will have a different layout.
If a large site wants to use a unique layout for a group of pages, then additional layouts may be created for those pages.