According to Wikipedia, BDSM is defined as a type of roleplay or lifestyle choice between two or more individuals who use their experiences of pain and power to create sexual tension, pleasure, and release. The compound acronym, BDSM, is derived from the terms bondage anddiscipline (B&D, B/D, or BD), dominance and submission (D&s, D/s, or Ds), sadism and masochism (S&M, S/M, or SM).
Most people view BDSM as a bedroom only experience where rough sex, spankings, and maybe even a little hand cuffing and whipping brings a little fun and excitement to the table when the usual vanilla stuff (traditional sex) gets dull.
Some people view BDSM as a lifestyle and there are a sizable number of 24/7 relationships that have a Dominant/submissive (D/s) dynamic. You may not know it, but the couple down the street may follow a strict D/s role where one person in the relationship is in charge, and the other person does his or her bidding!
You may think that this sort of dynamic only takes place in foreign countries where religion or culture encourages such behavior, but this just isn't the case. Many women that are strongly into feminism in the U.S. enjoy being under the control of a Dom, while many "macho" men, perhaps CEOs, football players, etc. get off on being told what to do and being put in their place by a woman!
Want to learn more about BDSM? One good place to start is the Wikipedia entry on BDSM! It's full of great links and the information contained in it is exceptional!