Can someone explain in layman's terms what this is all about?

it works like this:

You calculate your carbon usage, so power,petrol,travel,lights etc. You need to get your carbon usage figure.

THEN you offset that carbon figure by either planting trees which have a positive effect. There are lots of companies who (for a fee) will do it for you. Kind of like guilt money :-)

Governments do it on a larger scale, but effectively the same, except maybe "buying" carbon credits off another country.

I found a web shop the other day (lost it now!) that does carbon offsetting. So you buy something from them (TV or gadgets etc.) they then buy enough carbon credits to offset what you have bought and provide a certificate.

I'm not sure if this actually achieves anything, but if it means that a new tree is planted somewhere along the line then I suppose it kind of works.