To convert a file, you either enter a link, upload the file, or browse YouTube directly. The free version will let you convert files up to 100MB in size. It's easy to use and is very useful if you find videos that you can't play without converting, need to convert for mobile use, or if you want to download YouTube videos because it's blocked at school.
File formats it can handle:
VLC Media player is another option - it can play (and convert) pretty much any audio or video file and it is free.
Zamzar - free online file conversion - great resource
VLC Multimedia Player (and converter) - why convert files when this thing plays pretty much every audio and video format that exists!