Let's look at the clipboard.
The Mysterious Clipboard
The clipboard isn't so much a "thing" as it is a "place".
But even then, "place" isn't exactly accurate either.
The clipboard is simply a place where Windows remembers something - exactly one thing - for you.
That's really all it is.
And yet, as simple as it is, it's extremely powerful.
Putting things in the clipboard
You place things into the clipboard using either the Copy or Cut commands in various applications and in Windows itself.
Copy simply makes a copy of whatever it is you've selected and places it in the clipboard, whereas Cut deletes your selection after the copy is made.
Great. But, once it's in the clipboard, what then?
Using things in the clipboard
The opposite of copying something into the clipboard is to copy something out - the Paste operation.
Paste copies whatever is in the clipboard and places it at the current cursor or selection location.
Copy/Cut puts things in the clipboard (wherever Windows might keep it) and Paste copies the contents of the clipboard into your selected destination.
The clipboard is available for many, many things.
Most commonly, you can select some text in a document using your mouse, then right-click it and select Copy or Cut. You can then click elsewhere in that document to Paste what you had selected into a different location.
Windows Explorer uses the cut/copy/paste metaphor and the clipboard to allow you to move or copy files.
But the real power of the clipboard isn't in simple file or text manipulation.
The clipboard works between applications
The real power of the clipboard is that it's a Windows service that's provided to all applications that choose to use it.
Copy text from one application and Paste it into another.
Copy a file in Windows Explorer and Paste it into an email where it becomes as an attachment.
Copy a photo from a website and Paste it into a graphics program to save or modify.
Copy a file from one drive and Paste it to another to make a backup copy.
Hopefully, you get the idea.
Viewing the clipboard's contents
Windows XP includes a tool called "clipbrd.exe" (located in \Windows\system32) which, when running, will display the current contents of the clipboard.
For some reason, Windows 7 doesn't include this tool. You can copy the clipbrd.exe tool from a Windows XP installation, if you like. If not, you'll need to download a third-party application to view the clipboard contents.
Important: You don't need a clipboard viewer to use the clipboard. Just use cut/copy/paste as described above and Windows will handle it all just fine.
The one big limitation
The Windows clipboard can hold only one thing at a time.
When you Copy or Cut something into the clipboard, anything that was previously there is erased.
While that might sound like a serious limitation, in practice, it is not. The clipboard is a quick, short-term storage location as you copy data from one location to another.
While occasionally it might be nice to have more than one clipboard, and there are tools that attempt to do this, the simple "copy/paste" metaphor is quickly complicated in those cases to track which clipboard or which item it is you might be operating on.