Org-mode is many things to many people, and is very extentible.
You can do a lot with it, some use it like markdown, while others more like a task paper like thing or even literate programming.
Markdown is a markup language designed to make it easy to write posts and stuff like it, with easy to use syntax to do stuff like headings, links, text formatting etc. Org-mode can do all of this. But it is not 1 = 1. I personally prefer to use org, but I think markdown is a better option for writing for the web.
There is also this insane universe of using org-mode for task paper, calendaring and stuff like that. I personally perfer to write task paper, but I prefer to manage stuff through org-mode.
Another popular thing to use org-mode for is to do literate programming. The basic idea is that you write a document, and then you insert code blocks in it. Theese code blocks can either be something that are exported or you run it there.
This is just a short overview of the stuff I have use org-mode for. It is a very flexible system that you can do all kinds of crazy stuff with.