A block is a piece of code, usually showing summarised data from a module, which can be placed on any module's pages. For instance, you can use the Top News block of the News module and place it in the Newbb module for this block to show up while in the forums.
You can also create custom blocks, where you input the code yourself in either HTML, PHP or XOOPS code. The latter will convert linebreaks and allow the usage of XoopsCodes such as [ img] and [ url] (without spaces inside the tag)
Blocks are managed in System Admin -> Blocks