What is Twitter?
I get asked this question a lot lately. To be funny I say it is Facebook statuses on steroids but in all actuality it is much more than that. Twitter is a social networking site that allows its users to send messages (140 characters or less) which are called Tweets to others users who choose to receive them.

"...isnt Twitter just like a Facebook status?"
On the surface it might seem like a Facebook status but it is much more than that. Facebook is a two way street meaning that once I 'friend' you, my profile is accessible by you and vice versa. In Twitterland it is a one way street which can evolve into a two way street pending the necessary permits from your local government. Twitter users follow each other. Just because you follow a certain person doesn't mean they automatically follow you, hence the term one way street. To become a two way street that person has to follow you back.
The Twitterverse is open. By default your Twitter is account is open and visible for the world to see even if they aren't Twitter users. You do have the option to lockdown your account and make it private by where you choose who can see your tweets. I'm personally against this as it takes value away from the Twitter service.
The inhabitants of Twitter island send out tweets that show up in their followers feed. The feed is the first page you see when logging onto Twitter. It is the place where all your followers tweets are organized in chronological order. The more followers you have the more frequent your feed will be updated.
"What's the purpose of Twitter?"
Twitter is an excellent communication tool but I find that it has a higher value as an information sharing tool. Most of your followers and the people you follow you will never meet in life and that isn't a bad thing. Whereas Facebook most of your friends are people you have met in life. Twitter allows you to expand your world and connect with other people who share your interests in a very easy and simplistic way.
Personally, I follow a lot of people in the "tech" arena. Those include tech columnists, bloggers, young CEO's of various websites, engineers, developers and etc. If you haven't noticed my interests are tech related and eventually I want to start my own website. Twitter allows me a peek into those who have "made it" in the tech world and those who are trying to "make it". If you wanted to be a baker wouldn't it behoove you to listen to other bakers? Wouldn't be advantageous to you to read the same information they are reading on the internet? Twitter allows me to do all of this and more.
"I have to follow people I don't know to unlock the full value of Twitter?"
Of course not! Twitterville can consist of people you know. My followers consist of family, friends and people who I have met through Twitter related events called Tweetups. When I was on Facebook I saw that on average my friends would update their statuses one to three times a day. If you start updating your status more than that people get pissed off. On Twitter there's none of that, send out as many tweets as you want, just ask Solange! A lot of people have their rules for "tweeting" but I say don't listen to them. Do as you please. Inhabitants in the Village of Twitter abides by their own set of rules and that's what makes up the Twitter culture.
"Are there any cool features that Twitter has to offer besides these tweets?
Without these tweets there will be no Twitter but if you need a little more to keep you satisfied Twitter has a lot to offer. The Twitter API allows numerous third party developers to create killer applications that tap into the Twitter network. A website called Twitpic allows you to post pictures into your tweets. There are applications Tweetdeck, Twhirl and Tweetie that allows you access Twitter without actually having to go to Twitter's website. These apps are much more powerful in terms of indexing information, accessing tweets and etc through your computer or your phone.
Twitter has a killer search feature at search.twitter.com. This allows you to search through all tweets recently posted. If Google is best at searching for what has happened then Twitter is best at searching for what is happening. For an example when Allen Iverson (basketball player for the Detroit Pistons) cut off his cornrows during the NBA All-Star game last month Twitter had the scoop on it. A friend told me about it but I wanted to get confirmation. I went to Google and searched for it but got nothing and then I searched for it on Twitter and several people tweeted about it. There was actually a Twitpic picture of Iverson with a low cut from someone who was in Phoenix at the time.
"Whew, that's a lot of information! Thanks for telling me what Twitter is about."
Wait I'm not done, there is still more! But since you insist I'll bring it to end (Its 1.30a Tuesday morning and I'm getting tired). I hope you were able to see what Twitter is about. Don't look at Twitter as a competitor to Facebook because they both are different and their own ways. Until you try Twitter and become an active user is when you'll see what all the talk is about.