How does CVS know when a file has changed? Does it create a new revision every time you save a file?
You don't actually manipulate files directly in the repository. Instead you create a copy of the repository on your hard disk. You make any changes there and when you're satisfied with the changes, you tell CVS to put those changes into the repository and create a new revision. This process is called checking in. The check-in is the point at which you enter the reason for the change made.
How does your local copy of the repository get created? This is the opposite of checking in. Checking out creates a copy of the repository, complete with state information. Normally, you'll want to take a snapshot of the current state of the repository, but there are times when you want more control over which revisions of files are checked out. There are many options for this, including using symbolic names and explicit dates.