The window with a prompt in it (something that probably looks like: /home/larry# or some such, is being controlled by a program called xterm . xterm is a deceptively complicated program. At first glance, it doesn't seem to do much, but it actually has to do a lot of work. xterm emulates a terminal so that regular text-mode Unix applications work correctly.
For much of this book, we're going to be learning about the Unix command-line, and you'll find that inside your xterm window. In order to type into xterm, you usually have to move your mouse cursor (possibly shaped like an ``X'' or an arrow) into the xterm window. However, this behavoir is dependant on the window manager.