The phenomenon of parallax is used in astronomy as a distance measuring mechanism. Parallax (stellar parallax, or trigonometric parallax) is quite accurate, but limited to "close in" stars. Currently, we can use parallax to measure stars "only" out to a distance of about 1600 light-years. In the future, we hope to extend stellar parallax measurements out to tens of thousand of light-years.
You can try parallax out by simply placing your hand perpendicularly out from your nose, and looking at something on the wall. Close one eye and make a note of what you see. Now open that eye and close the other: everything shifts to one side or the other, as you alternate opening and closing one eye at a time.
Parallax is a visual phenomenon whereby nearby objects appear to shift position relative to more distant objects. In the picture to the left, the fir tree appears to shift its position relative to the background (more distant) mountains.
We subsequently define the unit of distance (to any close-in star, using this method), the parsec, or pc, as 1 divided by the angle p (expressed not in radians, but in arcseconds).
Since a very small angle in radians is equivalent to its sine or tangent, the annual parallax angle, in radians, can be expressed as 1 AU divided by the distance d to the star itself (this ratio is the tangent of p).
Stellar parallax is performed in the following fashion. A close-in star's placement is compared to significantly more distant background stars at two different times of the year, six months apart. This ensures that the "baseline separation" of the two Earth-bound observations is the maximum distance, namely two astronomical units. See the picture to the left. The angle subtended by virtue of these two observations is twice the annual parallax. Dividing by two, we obtain the annual parallax, p, which is expressed in units of arcseconds. An arcsecond is one sixtieth of one sixtieth of one degree, so it's quite small.
The image to the left neatly summarizes this angular argument. If a star subtends 1 arsecond of annual parallax, it is one parsec distance away. It is left as an exercise for the student to show that 1 parsec is equal to 3.26 light-years.
It is interesting to note that the unit of parsec is sometimes erroneously thought of as a unit of time. See this web page.
Note that parallax is not used exclusively with stars. The great Italian - French astronomer Cassini and his assistant Richer used the parallax of Mars in opposition to first determine the astronomical unit, and therefore the size of the Solar System.