What is hypertext? Basically, it is a start button to go to some other place, file, or program.

A button in your house can start a light or a bell far away. You really cannot see where the wiring goes to, but you know it works. If you paint the button a different color does not matter to what it does. However, if you lead the wiring somewhere else, the button might now have a new function.

An icon on your desktop works like that button too. It is a simple button (shortcut) to start a program somewhere else on your hard drive, or even on a different computer.
If you right click on an icon to view its properties you notice that you can either change the way the shortcut looks (change icon) or change the program that it starts.

Hypertext in a text-based program works the same.
If you highlight some words and insert hypertext behind it, the words now work like a button that will start some other program.

Example
1)    Open Microsoft Word.
2)    Type:     "Click here to go to a neat website"
            (Of course when you click on it nothing happens.)
3)    Highlight the sentence and insert hypertext.
           In Word right click and choose Hyperlink (Ctrl K)
4)    Type in a website that you like and click OK
            (http://www.1112.net/lastpage.html)

You see that your original sentence has changed color and is underlined. That is how hyperlinks look.
Click here to go to a neat website
When you move your mouse over it, it will turn change to a pointer.
That means your sentence is now "clickable".

Instead of text, you can also do this with a graphic, in which case it works kind of like an icon.