The /proc file system is specific to GNU/Linux. It is a virtual file system, so the files that you will find in this directory don't actually take up any space on your hard drive. It is a very convenient way to obtain information about the system, especially since most files in this directory are human readable (well, with a little help). Many programs actually gather information from files in /proc, format it in their own way and then display the results. There are a few programs that display information about processes (top, ps and friends) which do exactly that. /proc is also a good source of information about your hardware, and just like the programs that display processes, quite a few programs are just interfaces to the information contained in /proc.
There is also a special subdirectory, /proc/sys. It allows you to display kernel parameters and to change them, with the changes taking effect immediately.