I suppose the best way to describe a PhD is to break it down into 2 main goals:
1) To train you up to work as an independent research scientist, so that at the end of it you can do experiments and analyse the results and write them up into publishable form. It also gives you the opportunity to develop your own scientific niche and become one of the experts in that field!
2) To write a thesis. A thesis is a 200-ish page document that describes the work you did during your PhD, where, ideally, all the work is linked by a nice scientific story which leads the reader from simple beginnings to, ideally, some kind of real-world testing.
A PhD is 3-4 years long and is paid. How much you get paid depends upon what you study and where you study it. I get paid £17,000 a year – tax free. Many other PhD students get significantly less than that, which is why PhD students often get jobs within the university to help make additional money. A PhD is typically seen as an important step on the road to working professionally in science – although people are perfectly capable of being great scientists without one.
A PhD is a degree awarded by universities. The ‘Ph’ stands for ‘philosophy’ and the ‘D’ stands for ‘doctor’, so when you get a PhD you’re a doctor of philosophy. I think the philosophy bit is there for historical reasons – in the old days, any academic subject that wasn’t medicine, theology or law was considered to be philosophy (or at least that’s what Wikipedia tells me!).