Let's say you have a library called 'shared documents' in the human resources site. Resumes and vacation requisitions forms are to be stored there. Documents of resume type will have their own set of properties or columns particular to it as well as vacation requisition forms. They may also have a specific workflows attached to each. Resumes may have fields like city, school and skills while the vacation requisition form may have fields such as manager, date request and status. In previous versions of SharePoint you would have to create a separate library for each document type or have one library and add all the possible properties for each type of document. Content types allow you to define a set of properties, workflows and custom new, edit and display forms at the document level so that the resumes and vacation requisition forms can be stored in the same 'shared documents' library.
When a site content type is added to a list it becomes a list content type. Any changes you make to the list does not affect the site content type or any list type that inherited from it.
Content types can be created at the site level which can then be inherited by child sites.