CCD stands for Charged Coupled Device. This is the image sensor in a video camera. When light comes into a camera lense, it is momentarilly saved on the CCD. From there, it is transferred to the tape as a frame of video. This happens every 1/30 of a second.

Generally, the bigger the CCD, the better. The best cameras have multiple 1/2" CCDs, while lower end devices have only a single 1/8" or 1/4" device. By having a bigger CCD, the image will look better when displayed on a larger screen. It's the same reason why IMAX theaters use a larger film stock than a regular theater: a bigger film frame can be projected larger with less grain.

The reason some better cameras have more than one CCD is for quality. Video has 3 base colors (red, green and blue). If you have one CCD for each color, it means they don't all have to go through one chip. When the three colors are separate, they don't blur and blend together. This means sharper colors and well-defined edges on people and objects being displayed.