It's not what you know, but WHO you know! Networking is a way to socialize yourself with peers in the same profession or other occupations. It is a great way to get to know people because the world is really a small place, just by knowing someone and then he/she knowing someone else can get YOU someplace in this world! For example, when applying for my first internship, I talked to a woman at my church who is the LSM for a major radio station and she told someone about me and I was hired! It have also "hooked up" my friends with jobs because where ever I worked, the management knew that I was a hard worker, so whomever I recommended would be good too.

You can network anywhere: church, bar, dinner party, at work. Here is how:
1. Introduce yourself
2. Small talk, my favorite is sports, you can almost never go wrong.
3. Find a common interest (Do you like scrapbooking?)
4. Invite for coffee sometime
5. exchange contact info: e-mail, work phone

The biggest thing is that when you meet people, build a friendship and stay in contact with them, because you never know that who you know will land you a major opportunity in life.