Bones are virtual objects that are used to control the deformation of character skins. For example in this scene:
There is a single mesh of a transformer character. But when you press play it deforms and waves to you. This was done by creating bones that represent the "bones" of the character. And then setting a skin operator on the mesh that references the bones. It is moderately complex to setup and we haven't yet focused on creation of skins or bones -- rather right now we import them via FBX if you have created them in order tools.
Full details here: http://en.wikipedia.org/wiki/Skeletal_animation
If you share your use case, I can describe how to achieve it.