When you scan a document -- a magazine article, say, or a photograph -- the scanner translates what it "sees" into a digital image and sends that image to your computer. That's fine for most documents -- except if you are scanning a page of text that you are going to want to work with. Word processors need more than an image to work with -- they need text. To turn a document image into document text, you need OCR software.
OCR stands for Optical Character Recognition. OCR software takes an image of text -- such as, say, myreport.jpg or letter.bmp -- picks out characters on a page as individual letters and numbers, and changes them into text that can be read by a word processor.
There have been OCR software packages around for years, and they've been getting better and better all the time. In fact, chances are that your scanner comes with quite adequate OCR software. If that's the case, than it's likely that you'll do just fine with that.
A basic OCR package will usually block out text on a page (to distinguish it from any photos or other non-text elements) and then automatically translate it. It should be able to reasonably imitate the typefaces used on the page (so that headlines are larger, for example), and separate paragraphs, outlines, etc.
More complex OCR software will allow users to specify exactly what areas of a scanned document should be converted into text, or will be able to convert other languages in other alphabets, such as Russian, Hebrew, or Arabic.
There are also special OCR packages available that specifically target business cards. Their purpose is to make it simpler to track business card information by reading the cards (using either a flatbed or business-card scanner) and porting the information directly into Outlook or other address book programs. While this can be a remarkable time-saver, especially for people who make a lot of contacts, I've yet to find a program that can handle the wide variety of business card formats that are out there. In the end, it was simpler to type in the information directly.

