Sharepoint is primarily a collaboration system. It lets users view common data and files, work in groups on documents (check-in/out), track changes to documents (versioning), etc. The portal interface is a repository of information for the organization. The sites in a Sharepoint portal can be organized by function or department, and serve as a "bulletin board" for users. You can insert what are known as Web parts into a page, to show items like calendars or lists. Sites can be created to manage projects or special interests.
Sharepoint also has a search and index function. You can index all of the portal information, and even crawl internal (file system) and external (Web site) resources. Users can attach alerts to sites or document libraries in the portal and be notified when items are added or changed.
The newest version, MOSS 2007, allows for the creation of "workflows" to manage business processes. So, for example, if a sales rep wants to add a new product to the inventory, they can fill out a form, which would be automatically passed to the engineering department, etc.
Sharepoint is highly customizable. You can program custom Web parts to show information from other sources such as a SQL database.
The security model can be strongly connected with your Active Directory, so access to sensitive info can be controlled through AD groups.
There is an option to have a public-facing portal, but it's quite pricey.
I suggest going to microsoft.com and reading some of the white papers on Sharepoint for detailed info.
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