Every server in the world that has access to the Internet has at least one IP address -- to a computer, this is like a phone number. An example of an IP address is 220.127.116.11.
When you sign up for a hosting account, your host assigns your account a specific IP address on one of their servers. If someone visits a domain name associated with your account, the visitor's computer will find out the correct IP address to which it should connect.
Usually you'll share an IP address with many other domain names. You can also purchase a dedicated IP address from your web host, and that will be yours alone to use.
Whichever the case, the important thing is that you have an IP address assigned to your domain, and that all the right nameservers know what it is. (A nameserver is a server that keeps track of which domain names correspond to which IP addresses.)
How will you know if you need a dedicated IP address? Most websites don't. The most common reason that a website would need an IP address of its own is if it requires an SSL certificate for secure connections to visitors.
Any business site that processes transactions will definitely need secure connections to work, so a dedicated IP address is a requirement for such sites.
Watch the tutorial immediately after this one to find out more about SSL certificates.
This completes the tutorial. You now know what an IP address is, and whether you need a dedicated IP address.