X11 is a windowing system, as described here in Wikipedia:
http://en.wikipedia.org/wiki/X11
Many of the open source software available for Linux and other Unix like operating systems has been recompiled for Mac OS X's use since it has the ability to operate X11 which is a common windowing system across many of the Unix like operating systems. A good place to find many of these programs is
http://www.sourceforge.net/
X11 in addition offers a command line like Terminal from which you can
access many of those programs both on your machine and other machines over a network. I don't know all those commands, but one of my favorite from days past was xhost with rlogin combination which let me connect to a different platform's X11 windowing system and run the programs as if they were locally run. Since it has been at least 10 years since I've done work with it seriously, I will refer you to the section of the board devoted to understanding the Unix side of Mac OS X:
http://discussions.info.apple.com/unix/
if none of your other questions are answered here about it.
