Blender is made of a hierarchy of Datablocks connected to Objects. The Object holds the transform info (location, rotation and scale) of each Datablock. This transform info is applied at the Object's center point, or its local pivot point (pink dot). The Datablock basically describes what the Object looks like. In general, the Datablock can be associated with Edit Mode. If you enter Edit Mode and move points, edges or faces of a cube Object, you have affected its Mesh Datablock ("ME"). If you move, rotate or scale the cube, you have affected it on its Object level ("OB").

In the Link and Materials panel (Figure 1), notice the two fields at the top. The Datablock name is on the left, and the Object name is on the right. With the default Cube in your scene, both will be named "Cube." So if you want to name items in your scene, which field should you use: Datablock or Object? From a beginners standpoint, go with the Object. The Object level will be unique because each Object will hold a unique location, rotation and scale, without affecting the Datablock. As you begin duplicating your objects, it will become more apparent (and sometimes confusing) of the power of Blender's hierarchy.

Let's say you created a cube that you intend to box model into a simple airplane. Name the object "airplane" and leave the Datablock as just "Cube." After you've modeled the cube to look like your airplane, create another primitive Mesh... perhaps a Cone. Notice that the cone, also, will default to the Datablock name of "Cone" and the Object name of "Cone." Name the cone Object "crayon" and enter Edit Mode. Extrude the bottom faces down (or whatever you want to do, just change it).

Now, click the drop-down icon to the left of the Datablock field to see "Cube" and "Cone" listed. With the crayon object still selected, pick "Cube" from this drop-down list. Instantly, the crayon becomes your airplane, and at the crayon's center point (local pivot). You have just swapped the crayon's Mesh for the airplane's Mesh.

Now, the crayon Object still exists, because its location, rotation or scale didn't change; only what the crayon looked like (the Mesh Datablock info) changed. You could move, rotate or scale the crayon Object (which now looks like your airplane), and it would not change the other Cube, because that is on the Object level, which is always independent.

However, if you now go into Edit Mode and select a vertex and move it, both Meshes change their appearance. That is because the two independent Objects now share the same Mesh Datablock.

Watch the video tutorial: Datablocks - Intro.