The rpm command is the Red-Hat Package Manager - the package management system used by Red-Hat Enterprise Linux, Fedora, CentOS, OpenSuse and many other GNU/Linux distros.
rpm is used to build, install, update, query and/or remove software packages which are packaged in Red-Hats .rpm format.
I have to admit, I mainly use debian based distros which use the debian .deb package format (or Arch, which has it's own package format). I haven't used any distros which use rpm for a few years, so I'm a little rusty with the rpm command myself!
With current distributions that use the RPM format there are better front-ends for installing packages so that dependencies will be properly accounted for and installed if necessary. For Red Hat distributions (RHEL and Fedora, Scientific Linux, CentOS, Oracle Linux) you would use the yum command (YUM == Yellowdog Update Manager). For OpenSuse or Suse and related distributions you would use yast (I don't know what that stands for).
@Rubberman: True, yum and yast are far more convenient for maintaining rpm based systems. I meant to mention them in my previous post. But I ran out of time, so I posted what I had. After all, it seemed to answer the OPs question...ish! Heh heh! :)
When I ran last ran Fedora (back when I first started using Linux), I only ever used the rpm command when I had to manually install a package I'd downloaded from elsewhere. The rest of the time I used yum like any other sane person would! I imagine trying to use nothing but rpm for package management would be a nightmare! XD
BTW: I think yast stands for 'Yet Another Setup Tool'... Something like that!
RPM predated YUM and is not used as much. You can use it to install a rpm you have downloaded. Yum will go for the repo not the downloaded file. rpm can also be used to verify the binaries. Lets say you think someone may have gotten onto your system and messed with httpd AKA Apache2 rpm -Vf httpd Will let you know if the package matches the sum from the repo LPI 102.5 Use RPM and YUM package management