So what is shutter speed exactly, and how does it work? The concept is actually fairly simple and relates directly to how long the shutter is open. The shutter is what lets light onto the sensor thus creating an image.
(This is an example of a long shutter speed taken at night. The colored lines are cars tail lights and headlights.)
When the shutter speed is set for a longer time period, say 1 second, this means that the shutter will stay open for 1 full second. When it's set shorter, 1/2500th of a second, then the shutter is only open for 1/2500th of a second.