Basically...
Jailbreak - This is to gain root, administrator privileges to open up the phone.
Baseband - This is the cellular modem - handles carrier lock.
iTunes - The application by Apple to transfer files to the phone (music, photos, videos)
TinyUmbrella - This is an application to backup SHSH Blobs to allow change of firmware.
SHSH Blobs - Signed files from Apple, without these your stuck to downgrade f/w.
UltraSn0w - This is an application to allow an unlock for the Baseband.
Pwnage Tool - An application for jail breaking.
RedSn0w - An application for jail breaking.
GreenPois0n - An application for jail breaking.
Limera1n - An application for jail breaking.
Sn0wbreeze - An application to create custom firmware.
Saurik - The guy that created a server to allow backup of blobs.
Cydia - The application that enables you to download hacks.
iOS Firmware - The operating system on your phone.
Untethered - A method that allows you to boot your phone without connecting it to the PC.
Tethered - A method that allows you to boot your phone with needing a PC.
iPhone Devs - The people behind the magic, these guys develop for the iPhone.
As already stated read through -
http://www.idownloadblog.com/jailbreak/