Basically it's a way of reshaping or finishing your work, making the stitches really stand out and look perfect. Also, helps in re sizing works that might be a bit too snug. Here are two really cool before and after pictures I found in an article on blocking on Lion Brand's website.
It's great for wearable pieces. Remember my Sidewalk Shawl?
In process before blocking:
See how it's less lumpy and lays flatter? And you can see the design a lot better as well.
It just makes them lay better and look neater. I block EVERY TIME I make anything in thread. Thread works especially benefit from blocking. I've posted photos in the past of before and after blocking on some of my doilies.
There are different types of blocking too. Wet blocking, spray blocking and steam blocking. I typically do wet blocking for my thread works. For this you just soak your FO (Finished Object) in water for a few minutes to really get it soaked all the way through. Then you lay it out on blocking boards, or the carpet, or another type of stiff mat (I've sued a mattress before) and pin it out, stretching as you go. Then you just leave it until it dries. With spray or steam blocking you pin it out first, then either spray it with water and let it set, or steam it and let it set until it's dry. That's it!! It sounds easy, but as I mentioned when I finished my desk runner, I really screwed that one up. I didn't use enough pins, or I really should have used wires along the long edge because instead of being nice and straight it was kind of spiky or wavy down the sides. But that's the great thing about blocking, you can re-do it. :) Well not too much though, blocking and re blocking too many times will weaken the yarn.
There's a lot of argument out there on blocking acrylic or non-natural fiber yarns. Personally I know it can be done, as I've done it myself. But there are a lot of nay-sayers out there who swear it can't be done. Now it is true that some types of acrylic are stretchy and not meant to be blocked and will likely just bounce back afterwards, and you may not get the same results as you would with a natural fiber. There is also what is called "killing" acrylic, which is when you steam block it (VERY CAREFULLY) and it actually breaks down the fibers and sets them permanently. Which means once it's done, it's done. No re-blocking and no un-blocking. It sounds so evil "killing" yarn, but it's not necessarily a bad thing. I've "killed" a couple pieces and they look wonderful! I'm not kidding with the "very carefully" part on steam blocking acrylic. If you get it too hot the yarn will melt. And that's just a gross mess that nobody wants.
So that was pretty long-winded but you get the idea now. And please, if you have questions on anything I post, feel free to ask!! I won't be offended or think you're dumb if you don't know what I'm talking about. Promise!! I think I'm going to add a tab to the top of my page as well with a glossary of sorts, too.