Lifelink is a static ability that affects what happens when the permanents with lifelink deals damage. Normally, when a creature deals damage, all that happens is that a creature or player receives the damage. Lifelink adds an extra wrinkle. When this creature deals damage, the controller of the creature will also gain life equal to the amount of damage dealt. Applying this life gain does not use the stack and happens at the same time as the damage is dealt.
This can often matter, as a player can both take damage and gain life at the same time. In some cases, this fact will keep a player in the game. For example, lets assume that a player is at four life and is being attacked by three Runeclaw Bears. If this defending player blocks one of the attacking Bears with a Child of Night, he or she will survive this combat phase. This is because when combat damage is dealt, the defending player will both take four points of damage and gain two life at the same time. This will leave the player with a life total of two… and still in the game.