The gist of the GPL is that the source code is available to anyone who wants it, and can be freely modified, developed, and so forth. There are only a few restrictions on the use of the code.
If you make changes to the kernel, you have to make those changes available to everyone. This basically means you can't take the Linux source code, make a few changes, and then sell your modified version without making the source code available, for no more than your cost of providing it.
Of course, you can't just copy source code from the Linux kernel and just use it your own programs. Copying ideas is fine, but cutting and pasting chunks of source is forbidden. (Well, actually, you can, but your program will then be covered by the GPL too. Often this is not a problem.)
This practical effect of this is that you can't charge much for the Linux source code. When you buy a CD containing the Linux binaries and source code, you're buying the convenience of installing from CD instead of downloading it off the net, and the convenience of having the code pre-compiled for you. You're not really paying for the software itself.
Software released under public licenses (like the GPL and others) has often been called "free software". This has led to some confusion. When Linux is referred to as "free", it means "liberated", not necessarily "zero-cost". Becuase of this confusion, the term "open-source" has been coined. For details, please take a look at the open-source home page.
Note that there is no restriction on how the kernel is used. You can use it at home, at work, in government computers and church computers and anything else. (See the next detail for more information.)
The GPL has a lot of ramifications and is too broad a subject to cover in this overview. You can read a copy of the GPL here.