There are basically two sides to RSS; the “provider” and the “consumer”.

The “provider” creates RSS Feeds, which contain information (say, recent entries in their weblog).  The “consumer” then takes those feeds and views them in some way; often with an RSS Reader type program.

Now, what the RSS 1, RSS 2, and Atom Templates in EE do is create the feeds for you.  By default, they’re set up to list entries added to your default weblog that comes with EE.  So, if you add new weblogs you want included in the feed or change something else then you may need to alter the Templates, but by default they should work with a default installation.  So, in this case, EE is letting you be a “provider” by offering these RSS Feeds that other people can access.

On the flip side is “consuming” the feeds.  Most people would do this with a desktop program that aggregates a bunch of feeds.  However, some people also want to display someone else’s feed on their own website.  The “Magpie” Plugin allows you to do that.  Using the Plugin you specify the URL to the other person’s feed and then EE will display the contents of that feed on your site wherever you put the Magpie Plugin code.  So, if you wanted to display recent new headlines from the BBC then you could do so.