When you get a new Mac, it comes with one startup drive (a hard disk or, in a few cases, a solid-state disk) named "Macintosh HD." This arrangement is perfectly fine for most of us, but it's not your only option. If the need arises, you can split that disk up. Any internal (IDE or SATA) or external (FireWire, USB, or eSATA) disk can be reorganized into one or more volumes called partitions.
Each partition appears on your Desktop as an independent disk, and you can even mix and match formatting methods from one partition to the next on the same disk. You can use Disk Utility (found in /Applications/Utilities) to repartition a drive, although doing so normally requires erasing the entire drive in the process. You can also choose from several third-party utilities, such as Prosoft Engineering's $99 Drive Genius 2 and Coriolis System's $45 iPartition that can change a drive's partitioning without erasing it.