It’s a question I get all the time (especially when people ask me what I do for a living). I created a presentation a while back to help explain what usability is, why it’s important, how much it costs, and how to learn more about it. I’ve revised it for public view, and put it up on slideshare. Enjoy!
Note: “Satisfice” is a term invented by Steve Krug (in his book Don’t Make Me Think) to describe the behavior of users when searching for something on the web–users choose the first solution that looks satisfactory. They don’t seek the optimal solution–they look for the first thing that will work.