I wanted to set up a web page but i didnt want to pay for it.
So i asked around for a good server and someone said Apache so i went ahead and downloaded it read a few documents and said to myself "how the hell does this help me?" i dont have a clue how to use it or anything and every file i read is in networking or server jargon. So can somebody please help me.
Explain to me in painstakingly lay man's terms what to do and if apache can help me in any way.
To sum it all up "What does apache server Do?"

Apache allows you host serve (host) webpages from a computer.

If you are installing Apache on your local PC, you can host webpages on it. Now, that might not be of much help unless you setup your PC in such a way so that anyone on the Internet can access your PC and the webpages hosted on it. Since you mention that you are a newbie, that might not be the best way to get your feet wet.

If you want to setup a webpage but don't want to pay for it, use a free web hosting provider. You can find a good list here.

Once you are more comfortable, you can look at paid hosting solutions or even using a broadband connection and your home PC to host websites.