Definition of Schema
Schema can be defined as a collection of schemas, i.e., html tags, that webmasters can use to markup their pages in ways recognized by major search engines or search providers.
What is Schema.org?
Schema.org is an initiative from Google, Bing and Yahoo! It is a collection of html tags.This means that now webmasters can use these tags in a way such that these are recognized by search engines.
How will Schema.org help in searches?
Using schemas would mean helping search engines understand what your page is all about. It will make search results even more specific. It is a win-win situation for webmasters, search engines and searchers alike!
Webmaster get to highlight what the particular page is all about; they can be very-very specific, thus ensuring that the search engines understand what the page is all about. The search engines in turn can categorize the page easily and finally relevant results will get delivered to the end users (searchers)
In fact this move was initiated by the major search engines so that it is easier for the webmasters to include mark up in the html codes that is universally recognized by all the major search engines.
More on the different kinds of schemas and their usage can be found here
I think this is a wonderful initiative by the major search engines, it will make life a lot easier for webmasters and it will make search results so very relevant. I love it!