I wondered the same thing and learnt about caucuses and primaries here:
http://news.bbc.co.uk/1/hi/world/americas/7049207.stm

As far as I can make out, each states Democrats and Republicans vote on who they want to represent their party at the presidential elections. No idea why it's done one at a time and not all on one day though.

This is a main Q&A on how the whole thing works:
http://news.bbc.co.uk/1/hi/world/americas/7118194.stm

and with this you can compare the main candidates stance on various issues:
http://news.bbc.co.uk/1/shared/bsp/hi/elections/us/08/issues/html/democrats.stm

The Iowa caucus is unique. Throughout the State, there are a variety of meetings; some for Democrats, some for Republicans, and some for everyone, in a larger place. In a large room, posters designate the areas for each candidate. At the opening, someone makes a short statement, for each candidate. Then the people "caucus", that is, walk to the area designated for their favored candidate.

When everyone has chosen a spot, the candidates with less than 15% of the attendees are considered "not viable" (for that time only). Those people are then free to join any of the groups for the "viable" candidates. The Democrats have a complex formula for assigning percentages of the "preference", the Republicans do it by simple percentage of those in each group.

From all that, the parties decide how many of their delegates to the party's convention will be required to vote for each of the "viable" candidates, on the first ballot at the national nominating convention.

The big impact of the Iowa caucuses is the psychological impact on voters in other States. Obama now, suddenly for most people, appears to be a genuine possibility to become the Democratic nominee, and perhaps even the President. With perhaps equal suddeness, Hillary has lost her luster, and appears un-electable. Huckabee, never until now a household name, has at the minimum become the candidate for the others to beat. Romney looks much less appealing to some people than before.

Winning or losing in Iowa is certainly not decisive, but it is amazing how less than a quarter of one percent of the US voters can have a vast impact on how candidates are seen. It will be fascinating to see how this translates into results in New Hampshire, and in later primaries.

I found this article on BBC news today : it explains some of how the US system works.

well 1st you have to be filthy rich or have a rich backer like the gun lobby. then you have to fail numerous lie detector tests. be a philanderer rather than a philanthropist. played a major or minor role in the movies. be married to an ex candidate/sucessful winner. cheat/lie and generally abuse the constitution by ''miscounting'' the votes several times. have spent a pot of money on plastic surgery/teeth whiteners etc. be good at puppet actions. don't object to having your strings jerked. need i say more?