What is GPS and how does it work?

Global positioning system.

GPS is a network of satellites that can plot the position of a receiver on Earth by triangulation. Generally speaking, it takes 4 satellites to position a receiver accurately (within 1 meter). The receiver receives the data from the 4 satellites and based on the direction the receiver is from each satellite it pinpoints it's spot. Normally for triangulation there need only be 3 satellites, but due to the distances involved there is also time deviation to measure.

Since the GPS network currently (last I heard anyway) has 32 satellites it is very easy for any position on Earth to be in "sight" of 4 satellites at any given time.

This animation demonstrates 24 satellites not 32, so there will usually be an extra satellite in view at all times.

I can't reference it without it putting the image in again. It is on wikipedia, on the GPS page.