Lounge

I've been getting interested in the idea of RSS and blocks in moodle but I have to admit I'm a bit lost with it.  So far I've worked out:

1. Blocks are an additional module that 'does' something not in the main moodle release that you can add as a box on the main screen
2. websites, moodle forums, blogs can all decide to convert their content to XML and make it available to RSS readers, these pick up content when its changed on a site and mix it altogether in a useful way for the user.
3. Readers can be plugins for your browser that format the RSS feeds for you.
4. Moodle has an RSS reader as a block, this is server based, reads RSS feeds and makes them available when you access a moodle course (?)

Questions:
Am I on the right track with the above?
What should I do to read RSS feeds?

Thanks in advance

Richard