A single master page file can control the look and feel of countless pages within a site/application. It is basically a next generation approach of how to include common content in lieu of frames or server side include files.
Master pages store the layout and design, while content pages define the content. The content page is bound to a master page. Together the two create the presentation layer of content for a site/application.
In SharePoint content pages are called Page Layouts. But they work similar to content pages. The master page file is combined with the page layout to create the presentation layer of content for the SharePoint site. Master Page and Page Layout combine to create the rendered page
Examples of what you would put in the master page:
• Header code including company logo and branding images
• Footer code including copyright statements and links
• CSS (cascading style sheet) styles
• Body background colors, images or styles