Mutual Funds...

First off, let's go with some definitions...

Definitions

Stocks are shares of individual companies that allow you to own a certain percentage of the company. The usual type that most people get is called common stock where you get dividends and voting rights on major corporate decisions like structuring the Board of Directors.

Mutual Funds are a collection of investment. Funds can be subdivided into what fund they concentrate in. The major types include stock funds, which are made up of a collection of stocks, bond funds, which concentrate in bonds, and other miscellaneous funds that deal in real estate and commodities (goods like agriculture, energy, etc.).

Exchange Traded Funds are also another option for you to spread yourself out in the market. They are sort of like mutual funds except there are no management fees associated with them, but you have to pay commissions when you want to buy and sell them in the market.

Preliminary advice
When buying funds, look for the following information:
1) Management fees - Generally, the lower the better. Management fees really blow because they take away from any gains that may have occurred during the year. Let's say the fund gives you a 10% return on your investment during the year, and the management fee is 2% (pretty high), you're only obtaining a 8% rate of return.

2) DO NOT BUY LOAD FUNDS - Brokers want to sell load funds in order to line their own pockets. The load imposes costs that go directly to the broker and they are costs that you should not have to pay for. Most of the crappy funds charge a load and the better ones (Legg Mason, Vanguard, Dodge and Cox) simply don't need to charge a fund when their performance is already pretty good. Experienced traders will research the fund and purchase it, and not rely on the broker to sell them a fund.

Lastly, if you're interested in funds, Morningstar is a good site for you to go and do research. They primarily focus on mutual funds, but they also dabble in ETFs and stock. Hopefully this'll help you get your feet wet. All in all, never underestimate the power of compounding that can be gained from investing and always diversify your portfolio to keep your savings afloat rather than take an unwarranted risk and buy a stock.

Jam it back in, in the dark.

There do exist funds that are somewhat passive (have low turnover) that still manage to beat the market (See Bill Miller of Legg Mason's LMVTX stock fund which has beat the S&P for 13-14 years in a row.). Also, if you're buying from managers that are replicating the index, you're probably better off buying ETFs because that way, you avoid paying those management fees.

Examples of ETFs that replicate the market include: SPY (S&P 500), QQQQ (Nasdaq index), and DIA (Dow Jones Ind. Avg).

There's nowhere I can't reach.

One of the best recommendations out there is Burton Malkiel's A Random Walk on Wall Street. The reading is pretty light and very accessible and you should get a lot out of it.

This thing is sticky, and I don't like it. I don't appreciate it.