Sorry I didn't mean that to sound confrontational, but it's kind of difficult to explain on a forum - it's easier to understand when you see it being explained in a video or similar. It's all about referenced files - so instead of having to make many 'versions' of a file within folder structures and then edit it within an editor, it allows you to make 'referenced' adjustments to files which are non-destructive - meaning you're not editing the physical file on your hard drive, but a little side car file attached to it with the specs of your editing on it. This means lightroom handles the 'versions' part for you. Also means that you can develop a file how you want it and then go back 5 years down the track and reset it to a raw file and re-develop it. Normal destructive editing (opening in editing program -> edit -> save) means you can't go back to the beginning once you've saved the edited file.
Hope that helps a bit.