BitTorrent is a peer-to-peer file sharing protocol used for distributing large amounts of data. The BitTorrent protocol allows users to distribute large amounts of data without putting the level of strain on their computers that would be needed for standard Internet hosting. A standard host's servers can easily be brought to a halt if extreme levels of simultaneous data flow are reached. The protocol works as an alternative data distribution method that makes even small computers with low bandwidth capable of participating in large data transfers.
First, a user playing the role of file-provider makes a file available to the network. This first user's file is called a seed and its availability on the network allows other users, called peers, to connect and begin to download the seed file. As new peers connect to the network and request the same file, their computer receives a different piece of the data from the seed. Once multiple peers have multiple pieces of the seed, BitTorrent allows each to become a source for that portion of the file. The effect of this is to take on a small part of the task and relieve the initial user, distributing the file download task among the seed and many peers. With BitTorrent, no one computer needs to supply data in quantities which could jeopardize the task by overwhelming all resources, yet the same final result—each peer eventually receiving the entire file—is still reached.
After the file is successfully and completely downloaded by a given peer, the peer is able to shift roles and become an additional seed, helping the remaining peers to receive the entire file. This eventual shift from peers to seeders determines the overall 'health' of the file (as determined by the number of times a file is available in its complete form).
In this animation, the colored bars beneath all of the 7 clients in the upper region above represent individual pieces of the file. After the initial pieces transfer from the seed (large system at the bottom), the pieces are individually transferred from client to client. The original seeder
only needs to send out one copy of the file for all the clients to receive a copy.
Further Reading: http://en.wikipedia.org/wiki/BitTorrent_%28protocol%29