I like to use a Public Library as the metaphor for how Revit's Worksets allow many people to contribute to a single project. Why? It just fits well...at least I think so. Here is a quick reference to Workset terminology.
First, Revit's worksharing features are for just that, sharing. It is the tool that let's many of us work on the same project at the same time. A by product of worksharing is control over the visibility of worksets because Revit allows us to manage workset visibility in each view.
Back to the metaphor, in the image above Library terms are in black and the red ones are Revit terms. The library in this metaphor is the Central File, Revit's term to describe the main project file. The shelves in the library are worksets. The books are every object in the project, walls, doors, windows, sheets, views, linetypes, dimension styles, text, tags, design options...everything is a book.
Revit allows us to put some books on our own shelves (worksets) but for the most part Revit manages the shelves for things like views, project standards, content etc. So we never have to worry about putting text on the right shelf, Revit just takes care of that, they become part of the "Shelf" of the view they are placed in.
Our library card is a personal copy of the Central file, called a Local File. This library card tells Revit who we are and what books we want to borrow or have borrowed. The phrase "Synchronize with Central" (or SWC, a command) and "Relinquish Editable" (options for the command) is how we return our books to the library so others can read them. It also allows us to see what has been returned so we may borrow them now.
Assuming you are familiar with AutoCAD and working with External Referenced files? Imagine you could use in-place Xref editing on a dwg file while others were doing the same thing to different objects from the same file. If you could, that would be very much like what you can do using Revit's worksets. In a sense Revit manages a project at an elemental level while AutoCAD manages at the file level. With Revit we are able to move past the file "barrier" and reach into the individual elements that make up our building, books on shelves.
Worksets seem hard for new users for two reasons, new language and rules. In reality they aren't hard, they are new and/or different. Some of us just have a harder time with language and rules than others!
(this paragraph contains dated comments referring to Revit 8.0)
I like to refer to the recent improvements to Revit's worksharing tools as "the kinder, gentler worksets" because worksets just don't get in your face anymore. In fact it is quite possible now to work on a project that uses worksets and forget that you are.
If you have avoided worksets because of fear...fear not. If you have because you haven't had a need and the extra complexity seemed over the top? Venture in, the waters fine!
[Edited for Revit 2010 language changes]