On-board stuff is exactly that, the parts are included on the motherboard.
On-board stuff is there so that you don't have to buy extra parts if you are just starting to build a computer. If you plan on getting a good video card/sound card, getting a motherboard with on-board stuff is not imperitive.
If you plan on getting a good system for gaming, don't plan on using the on-board video and sound, most blow serious goats. It doesn't hurt to have them there though, you can always turn them off. On-board things are usually the bare minimum to be able to start your computer.
On-board LAN is great to have. A LAN (local area network) port is used to hook up to a router, switch, HUB, cable modem, etc.. These are usually satisfactory for anything you will need it for.
All in all, on-board thigns are nice to have. If you have problems with your video card, for example, you can fall back on the on-board while you exchange/fix your good video card.
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