A drill chuck is used to tighten the 3 jaw clamp onto your drill bit. If you have an old tool, you probably have a keyed chuck. It looks like an allen wrench and you use that tool to adjust the clamp so it firmly grips the drill bit. That way you can drill without the bit moving around at all. Newer drills have what's called a keyless chuck. All that means is that you can clamp and declamp your drill bits without using the key. That makes it much easier to use and is worth investing in another drill if you don't have a keyless setup. You can also buy conversion kits that will turn your old chuck into a keyless one.
If you're unfamilair with chucks, read on. There is terminology used that is hard to understand, well impossible, unless you know hte terminology. A three-jaw-chuck means that there are 3 "grippers" in the drill that clamp on the drill bit. Look at the picture above and to the right. There are 3 triangle type shapes in the center. Those are the jaws. If you see something about a four-jaw chuck, that means there are 4 "grippers" that will tighten on the bit. A three jaw is standard. A keyless chuck means that you can securley fasten the bit without using a key to tighten the jaws. You can do it with the twist of your wrist.
Here's a video that has an explanation about this same topic. The guy in the video has tools and chucks so you can see everything.