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Databases are used to organize information in a way that allows the data to be easily retrieved. For example, a database could be a simple list of names and addresses or detailed information about products available for sale. If a large amount of information is being stored then site visitors are usually allowed to perform searches. A database can be an important part of making your website dynamic and useful to your visitors.
Often a website with a database will require some behind the scenes processing. This processing could be automatic updates, web page generation from new data, or reports on site activity.
I have experience working with a number of databases: from simple text files to RDBMS. Specifically I have worked with MySQL, PostgreSQL, Sybase and and MS SQL.
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