SSL certificates use encryption to provide secure communication over the Internet. In addition to being a key component to the actual encryption of data, they also provide a mechanism to verify you are communicating with the web site you intend.
Most people will recognize SSL certificates in conjunction with e-commerce transactions to protect sensitive data such as credit card information from being revealed to a third party. They are actually used for many other purposes such as secure email, secure file transfers, code signing, and many more.
The SSL protocol was first developed by Netscape and a version was released in 1995. That version was discovered to contain several security flaws and was revised. A newer version was released in 1996.