Answer:
   
   In Deut. 6:4-9, a passage commonly known as the Shema, G-d commands us
   to keep His words constantly in our minds and in our hearts, by (among
   other things) writing them on the doorposts of our house. This is done
   using a mezuzah. Almost all Jews have a mezuzah on the main external
   door of their house. More traditional Jews have them on all external
   doors, as well as on internal doors (except bathrooms), especially
   bedroom doors. I have even seen mezuzah's for cars!
   
   A mezuzah is a small case that is mounted on the doorposts of Jewish
   homes. It is not a good-luck charm. Rather, as noted above, it is a
   constant reminder of G-d's presence and G-d's commandments.
   
   The mezuzah contains a tiny scroll of parchment, which has the words
   of Deut. 6:4-9 and the words of a companion passage, Deut. 11:13. On
   the back of the scroll, a name of G-d is written. The scroll is then
   rolled up placed in the case, so that the first letter of the Name
   (the letter Shin, which looks like a "W") is visible (more commonly,
   as the mezuzah is not transparent, the letter Shin is written on the
   outside of the case). The scroll must be handwritten by s sofer
   (scribe) in a special style and must be placed in the case to fulfill
   the commandment. It is commonplace for gift shops to sell cases
   without scrolls, or with mechanically printed scrolls, because a
   proper scroll generally costs more than the case. According to
   traditional authorities, mechanically printed scrolls do not fulfill
   the mitzvah of the mezuzah, nor does an empty case.
   
   Once a mezuzah is ready to be affixed to a door (i.e., it has a proper
   scroll inside), it is nailed or otherwise affixed, at an angle,
   typically with the Shin angled towards the inside of the house or
   room. At this time, a brief ceremony called Chanukkat Ha-Bayit
   (dedication of the house) is performed.
   
   Why angled? First, angling is an Ashkenazi custom, but as to why we
   angle, well, as with anything in Judaism, there are multiple
   explanations:
     * One explanation is that until the 12th or 13th century, all
       Sepharadim and nearly all Ashkenazim put their mezuzos into the
       doorframe so that it was positioned vertically, with the letters
       in the same position as when you read them. However, there is an
       opinion in the Talmud that was followed by a minority of
       Ashkenazim that the mezuzah should be placed horizontally. The
       Tosafists were the first to propose current Ashkenazi practice of
       implementing a compromise. The current 45o angle satisfies both
       opinions.
     * Historians of halachah, however, wonder about this. First, the
       Tosafists were staunch supporters of assuming Ashkenazi norms were
       halachic, even if there was no souce in the published texts. So
       why would they be the ones to suggest a change here? The second
       problem is that we rarely take comprimises rather than following a
       single ruling. If you're unsure, then be stringent in Torahitic
       matters, and follow a lenient ruling in more minor Rabbinic ones
       -- as we do for other doubts. But this approach is nearly unique.
       It was therefore suggested that there is a second reason for this
       ruling. In houses that belonged to Jews and were taken over by
       Crusaders, the mezuzah was removed and the new Christian residents
       would add a horizontal line to the scar to make a cross in the
       doorframe. This couldn't be done with the new diagonal scheme.
       Therefore it was theorized that maybe the Tosafists were trying to
       outmaneuver the Crusaders in a battle for our doorframes.
     * The Chaim Mageni of Chevron had a different answer, based on his
       studies of history and the gemoro. He states that the original
       dispute was not about how to place the mezuzah but about which way
       was forbidden; specifically, it is forbidden to place the mezuza
       in such a way as to appear to be a lock on the door. Those who
       placed it vertically, held that this was the horizontal position
       (as dropping a bar across the door). Those who used the horizontal
       position, stated that the vertical position was that of the
       locking bar being inserted into holes on the top and bottom. Thus,
       the compromise is a position which is acceptable to both views.
       This is not really a "compromise", but is a method chosen so that
       (though not preferable according to both views) the mezuzah would
       still be kosher according to both views.
       
   Speaking of doorframes. The norm in most areas until the 19th century
   or so was to place the mezuzah inside the doorframe. Our current
   practice of hanging a case on the doorframe is halachically equivalent
   to enlarging the frame and putting it inside. In fact, the original
   custom remains in the older parts of Jerusalem. If you go to the Old
   City, to the current Moslem Quarter, you will find patches in the
   doorframes where mezuzos were torn out of the Jewish homes in 1948.
   
   When traditional Jews pass through a door with a mezuzah on it, they
   will touch the mezuzah and then kiss the fingers that touched it. This
   is done to express love and respect for G-d and G-d's commandments. It
   also serves to remind them of the commandments.
   
   When you move, unless you know for sure that the new occupant is
   Jewish, it is proper to remove the mezuzot (plural for mezuzah). This
   is because if you leave it in place, the subsequent owner may treat it
   with disrespect, or treat it as a superstitious object.
   
   More information on Mezuzahs may be found at
   [5]http://www.jewfaq.org/signs.htm#Mezuzah