In real laymans terms. ie. mine, and much as ExGrunt said but even simpler and the only things I've found useful....
Bluetooth: Means you can get all those photos off your phone and onto your computer without the need for a lead. Likewise put MP3s on your phone from your compuer without a lead.
And, at a pinch, connect your computer to the internet through your mobile, again without a lead... at great expense mind you, £3 a megabyte might sound reasonable enough... I assure you, a megabyte is nothing, you can use an awful lot of them before you get the first bill since you started messing with the possibilities and learn your lesson.
Wireless LAN: Means you dont need a wire from your computer to the phone line/modem. Lets you sit in the garden drinking beer while wasting hours on the internet.... two birds, one stone. A sure fire winner. Also allows you to sit in Starbucks, airport depatrure lounges, outside offices and houses etc with unsecure networks and get on the net. A bit like plugging into their connection by radio. Very handy... but again a good way to lose hours when you should be doing more important things, or work.
Wireless installation is simply a matter of buying a card for the laptop. £35 or so. That'll let your laptop 'see' and connect to wireless networks when your in range of one that's publically accessible.
If you want to use it at home you'd need the other end of the setup to plug into the phone line/modem to 'talk' to the card in your laptop. Like the second one of a pair of walkie-talkies. Numerous ways of doing this end of the setup depending on how you connect to the internet at home currently. Starting from £60 upwards.
Oh yes, I should have said, by 'install' we're talking about plugging the card into the hole in the side of the laptop, no screws, no skills. XP should do the rest software wise. Those people you mentioned would most likely try and charge you for this 'installation'.
Mind you, to them it may be some major technological undertaking.
Awaits slap for Barbiesque explanation. 