What Is the Internet?
Several Definitions of the Internet
Internet (upper case "I")
The vast collection of inter-connected networks that are connected using the TCP/IP protocols and that evolved from the ARPANET of the late 60's and early 70's. The Internet connects tens of thousands of independent networks into a vast global internet and is probably the largest Wide-Area Network (WAN) in the world.
The most important technological innovation of our generation, the Internet is actually a network of networks. Originally designed by the U.S. Department of Defense so that a communication signal could withstand nuclear war and serve military institutions worldwide, the Internet was first known as the ARPANet, the most robust communication technology. It is a system of linked computer networks, international in scope, that facilitates data transfer and communication services, such as remote login, file transfer (FTP), electronic mail (e-mail), newsgroups, and the World Wide Web. The Internet greatly extends the reach of each connected computer network (see: network effect, IP).
internet (lower case "i")
When you see "internet" written with a lowercase "i," it usually refers to a group of local area networks (LANs) that have been connected by means of a common communications protocol. Many internets exist besides the Internet, including many TCP/IP-based networks that are not linked to the Internet (the Defense Data Network is a case in point).
How does the Internet Actually Work?
HowStuffWorks - This is a really good site to visit if you want to know much more about how the Internet actually works.
An Atlas of Cyberspaces - This site is for you if you like maps and want a very in-depth treatment of how the Internet works. Not for the faint-hearted!