I've found iTunes is was fantastic program when I first used it. This page might be outdated.
ITunes is written mainly to be used with an IPOD. If you don't have an iPod you might never use it, but if you do have an IPOD, iTunes is essential! There are other 3rd party programs around to get music/files onto an iPod ("Anapod explorer" is a good one), but iTunes does the job pretty well & also adds album art from the internet!. Music and video is put into a library - a database which uses the ID3 tags which come with most .mp3 and .acc files. This lets you organize songs by artist, album, genre etc. ITunes lets you organize your music & upload it to your IPOD (although it can be a bit fiddly)... and be warned that if you synchronize music, it might suddenly delete all the songs from your ipod if you library is empty.
iTunes works by copying all songs & movies one way - from your computer to the iPod - you can't transfer them the other way. In the process your iPod keeps a database of all songs, letting you chose what type of songs to play.
Most important options for iTunes are set in "Edit >> Preferences"... careful with these options!
Organizing your music collection ("Edit >> Preferences >> Advanced >> General") with music in folder as they suggest (ArtistName/AlbumName/01 TrackTitle.mp3), and making sure you use ID3 tags on all your songs is a good idea. A good music collection is an organized one.