OK I think I'm finally getting my head around all this, and I'm completely stupid... :)
So please correct me if I'm wrong!

--Steemit is like Reddit (but more decentralised and with its own economy)
People can post unique content, have group discussions, share curated content, and more

--STEEM is basically money (the currency used on the site for voting/tipping. It can be traded for Bitcoin/Fiat)

--STEEM POWER is a bit like "premium membership" but also a sort of social status which proves your good intentions and contributions.
There are various benefits of having more STEEM POWER. It can be earned, or bought. It is perhaps of more interest to those who are invested in the success of Steemit, particularly content contributors.

--STEEM DOLLARS help users to buy&sell using a sort of surrogate US Dollar

Am I getting warmer?