Traditionally, one will create a design in Illustrator by piecing together multiple elements to create a graphic by stacking and grouping. Each element will have a different treatment, color, effect, fill, stroke, etc. The problem here is, if you're not careful when moving, resizing or otherwise editing all or part of a graphic made of multiple elements, you may misalign the graphics. Editing is so much easier using one element or group with multiple appearances applied.
The illustration below displays the word 'appearance' on one text path with multiple appearances applied. If you look at the Appearance panel below you will see multiple fills and strokes applied to this one element. A few of the fills and strokes have effects applied. You can easily grab any of the fills and strokes and adjust the stacking order to change the appearance of the design.
I will get more in-depth with the Appearance Panel in a future posting. In the meantime, if you haven't already done so, try using the Appearance Panel more. It's a great way to work. Loads of fun.