"Linux is an operating system" is not entirely correct.
Let's say you have Microsoft Windows as a toolshed, to go in there you have to pay up front. Some folks have the idea that toolsheds ought to be free, as in speech. One "type" of toolshed is the Linux toolshed, some are made by Redhat, some by Mandrake, and some are shed kits that give blueprints so you can build it yourself (Like Gentoo Linux).
The core idea behind the Linux style toolsheds is that the blueprints for the whole thing (and the included tools) are open sourced. So if you want, you can look at the source code and see how it all works. Gentoo Linux gives you the source code, and some scripts, and you literally build the entire system.
Redhat (or Fedora Linux) use Redhat's style of environment, you have the "redhat package management" system.
What can you use it for? Everything you do in Windows, except gaming. There are very few Linux games, and it's always up in the air as to which ones get ported and which ones don't.
When you learn the command line interface, Linux suddenly becomes extremely powerful, and you can do WAY more with any run-of-the-mill linux distribution than you ever knew you could do with your PC. Everything from programming, to graphics art, to just plain webbrowsing and listening to music with a much more refined, cleaner, faster, easier to use interface than Windows has.
That's about it, in a nutshell (understanding of course, that I am missing thousands upon thousands of other principles/uses for Linux). When you master it, suddenly you can use your computer for whatever idea pops into your head, literally.
The other thing about open source is that you...YOU, are free to contribute code to any project.
The Adama maneuver was incredible, go watch Exodus pt 2.