If you have gone through my last post which links to a Google Tech Talk - you know most of the stuff related to OpenID.
OpenID facilitates decentralized single sign on.
First of all you need to have an OpenID - an identifier.You can get this through an OpenID Provider. myOpenID is such an OpenID provider - which costs you nothing. Once you are there - you can sign up for a new OpenID.
Now you have an OpenID as well as a password. It's time to use it. LiveJournal is one of the OpenID consumers, where you can 'sign in' with your OpenID. Once you enter your OpenID there, you'll be taken to your OpenID Provider [myOpenID] for authentication - where you can enter your password. Once done - you are logged into the LiveJournal.
Similarly, the same OpenID can be used in many other sites as well.
Blogger in draft is another such OpenID consumer.You can add comments to this post - by signing in with your OpenID.
This removes the issue of having multiple passwords and duplicating the same profile accross many sites.