White balance is the process of removing unrealistic color out of pictures. It's used so that subjects that appear white in person come out white in your photo as well. It's so the photo looks as close to as how your eye would portray it, more realistic and not flushed. Proper camera white balance has to determine the "color temperature" of the light source, which also refers to the warmth or lack there of, of white light.

Correct

Incorrect
All Info and Photos from: http://www.cambridgeincolour.com/tutorials/white-balance.htm
Color Temperature
Color temperature is a description of the vairiety of the spectrum of light given off by the subject/environment in the photo.
Different light sources give off a different temperature
ie:
Candle light gives off 1000-2000 K
Flash gives off 5000-5500 K
Shade gives off 9000-10000 K
You can change the outlook of your photo by changing the white balance in your camera's menu (usually has flourescent, cloudy, indoor, sunny, etc...)
Temperature can be changed on your cameras menu as well.