Have you ever taken a picture of a beautiful winter scene and end up with a frustrating blue tint instead of crisp, white snow? White balance is used to prevent exactly this situation from arising.
The white balance is a sensor that analyzes the lighting conditions and colors of a scene and make adjustments so that the white in the photograph appears white. At the same time, the other colors will be made to look as natural as possible. This is one advantage digital photography has over traditional film. With film, you buy the film with a certain lighting condition in mind. If that changes, you need either to change your film or hope that errors can be fixed in post-production. More... / Hide...
Most digital cameras let you to utilize either automatic white balance or choose between several preset conditions, for instance full sun, cloudy day. Automatic white balance works under most conditions. There are times, however when you wish to enhance the color to give a warm setting for portraits or sunsets. Then set your cameras white balance to cloudy. This will deepen the colors and give your portraits a glow. It will enhance a beautiful sunset and make it incredible.
Take the same photo with different white balance settings. See what feelings each changes in setting evokes. Make notes. very soon, you'll have a good idea of what each setting does. In time, you will naturally get the best setting for your particular situation.
Setting white balance is a small change. But it leads to major effects for your finished photos. Use it well and you will no longer have to be concerned with faded sunsets or blue snow.