I'll see if I can take this one.
Ok, so you buy an ebook reader. Most of the popular models are just about the same: e-ink screen, some buttons, maybe wifi and touchscreen. That's the hardware.
Then you've got the software side: the bookshelf, apps, reader software, as well as the whole framework behind. This is what most people end up comparing between readers. This is the firmware.
Openinkpot is a firmware replacement. On supported readers you can completely replace your original firmware with OI, with its framework, custom bookshelf, reader software - all of it. Your original firmware doesn't have folders in the bookshelf? You can't choose the fonts you want to read in, or adjust the margins, or bla bla bla? No problem. Get rid of your old firmware. Openinkpot has these features, and is becoming more useful day by day. OpenInkpot is developer friendly, free, and completely open source, so anyone can add the features they want and share them with the community.
That's OpenInkpot. Got it? You can go to the website and find out more.
ps. Please correct me, someone, if I got something wrong. I tend to play a little fast and loose with the technical terms