Ryan: There really isn't a lot to Emacs - the core doesn't do much.
What makes it really powerful is that it has an embedded Lisp interpreter.
With this, you get extra functionality, such as modes for the different formats you're editing (like Zap and StrongEd), display niceties such as folding editors, 80-column line indicators, syntax highlighting, automatic indentation (and re-indentation).
There's even stuff like an FTP client to connect to a remote machine and manipulate the file as if you were locally editing it, games (Tetris, Minehunt spring to mind), IRC client, shells and compiling.
Since (practically) everything is Lisp, it's modular, so you can upgrade the system one module at a time, or you can decide not to use a particular module.
There's only really two problems with it:
1) It's big (although not as big as Word). On my Win2K box here, it's using 15M (but has 17 files in memory, 8 are Java), and on FreeBSD, it's 10M, with 9 files in memory).
2) It requires an element of 'keyboard playing', where you have to remember keyboard shortcut sequences to do a lot of the work (like Ctrl-X Ctrl-S to save). In fact, mouse support is minimal, which suits me fine - if I'm editing text, then I'm already at the keyboard, so why should I move the mouse to do something simple?
My favourite feature? It's the automatic reindentation by pressing TAB anywhere in the line (if the current editing mode supports it), and also the indenting regions.
Now, I use XEmacs on Windows and FreeBSD to do all my work, and I'd dearly love to do the same under RISC OS - especially when I've just come home from work and press Tab whenever I start a new line and find out that the indentation's been screwed...