What is a Turbo?

A turbo charger is basically a device that uses exhaust gasses produced by the engine to blow air back into the engine. The additional air is supplemented with fuel by the ECU (engine control unit). This causes the engine to produce much more power since it is being supplied with more air and fuel than it possibly could without it. A naturally aspirated engine (non-turbo, standard engine), or "N/A" engine, has to "suck" air through the intake manifolds, throttle body, air filter, etc. With this setup, the most air pressure that can enter the combustion chamber of the engine is a bit less than the current atmospheric pressure. With the turbo, air is being blown into the chamber with positive pressure so that much more air and fuel can enter. A typical turbo charged engine will generate 7 to 10 psi of maximum positive pressure, or "boost". The turbo charger, or "turbo", is mounted directly to the exhaust manifold, where exhaust gasses pass over a turbine impeller that is attached to a short shaft. On the other side of this shaft is a compressor turbine, which pulls outside air in through the air filter and blows it into the intake manifold. So basically, the energy from the expelled exhaust gasses, which would normally be wasted on a N/A engine, is being used to pump air back into the engine.
The shaft is supported by a bearing housing that is lubricated and cooled by an oil line from the engine. Since engine exhaust has such high temperatures, the exhaust side of the turbo can reach thousands of degrees F. This is why it is so critical that the engine oil be changed religiously (every 3,000 miles), because old oil can burn and leave deposits in oil lines and housings, called "coke". Coking can be virtually eliminated by using a synthetic oil and changing it frequently (every 6,000 miles). Some turbos feature an additional passage for a coolant line, to keep the bearing housing cool. This did little to keep temperatures down while running, but it had a huge effect after the engine was shut off. Without the coolant passage, the oil would drain when the engine was shut off and the turbo bearing housing would reach incredibly high temperatures from the heat transferring out of the exhaust manifold. This took its toll on the life of the bearings. The presence of the water keeps the housing cool.
When the engine has been idling or at low speed for a while, the turbo is not spinning or is spinning very slowly because there is very little exhaust leaving the engine. When the throttle is opened, the engine produces more exhaust, which spins the turbo faster. A faster spinning turbo means more air and fuel is being blown into the engine, therefore even more exhaust is being produced, which makes the turbo spin even faster and so on. This cycle is known as turbo "spool-up", which feels like a sudden surge in engine power and appears on your boost gauge as a sudden increase in pressure. The time before the surge, when the turbo is spooling up but the engine doesn't have much power yet, is called turbo lag. A large turbo charger can produce more air flow and pressure, but will have more lag because of its increased size.