The idea is that you can two (or more) different operating system installations on the same machine. They could be occupying different hard drives, or different partitions on the same hard drive, or a combination of both.
Basics of Dual Booting
If you have two or more different operating systems on the same machine, there must exist some sort of software to allow you to switch between them. On Intel-class machines this software is known as the bootloader and sits (typically) on what is known as the master boot record, MBR. This bootloader must be configured to boot the multiple OSes.
Many operating systems are greedy with respect to their bootloaders, and assume that you will only be using their software. Operating systems like these will wipe out your MBR and replace with with their bootloader without even consulting with you. (For example, Microsoft Windows is this way).
Because of this, it is generally advised to install your multiple OSes in a very specific order, with whatever OS you wish to govern the bootloader installed last. For example, if I wanted a computer which was triple-booted with FreeBSD, Red Hat Linux, and Microsoft Windows 2000, and I wanted Red Hat to control the bootloader, I would install these systems in the following order:
Microsoft Windows 2000
Red Hat Linux
NOTE: With most modern operating systems (including every Linux distribution I know of) you get installation media that can act as recovery discs. If you know what you are doing, you can fix MBR problems caused by incorrect installation order using these discs.