WINE stands for Wine Is No Emulator. what it does is it intercepts windows system calls and translates them into linux system calls and vice versa so a windows program can be run in linux, as transparently as possible while the program thinks its running in windows and linux thinks its running a linux program.
in my experience wine is clumsy and on the ocassions i have tried to use it it has not fulfilled my requirements however i have no patience to fiddle with it and make it better, and have not given it a proper go. a lot of people talk on here as if WINE works a lot better than i have ever got it to, maybe they do get it to work better i don't know. there is another version known as WINEX which i have not tried which does the same thing but it implements directX and all that crap too, so maybe that's more your thing if you want to run games.
my advice is that if you want it to 'just work' you are in for a long wait. you might consider a closed/proprietary/sosts money program such as win4lin (which i also have not tried) instead.
