An operating system, or OS, handles all the stuff you don't think about. For example, when you insert a CD, your computer knows that something has been inserted into drive 0110111110 or whatever, and your OS figures out that drive 0110111110 is a CD drive which should be spun at whatever rate and read into whatever program it chooses to run for reading CDs.

Also, virtually all modern OS's include a windowing system. A windowing system, as if you couldn't guess, is a program which runs your windows. Windows are a brilliant idea, because they allow you to have more than one program running and allow those programs to be graphical. Another luxury of windowing is the cursor, the little arrow controlled by your mouse, trackball, or trackpad.