It's the networking equivalent of a "null modem" cable. It permits the direct connection of two identical interfaces.
That is to say a straight through cable would connect send data on one port to send data on the other port when what you really want is for it to go to the receive data port. The vast majority of current switches and routers are smart enough to figure out the type of cable and adjust accordingly.
With "dumb" equipment such as most hubs and older switches, you have to make sure you use the right cable - though some have small switches to let you swap the type of port.
Connecting two computers together directly through their network cards almost always requries the use of a crossover cable to that sent and receive data connections "line up" properly.
There are 8 conductors in a standard cat-5 cable. Not all topologies use all the conductors. There are other categories as well, based on the number of conductors and rated frequency capability of the cable. Also of relevance, especially in high EMI environments is whether the cable is shilelded or not. The most common found for ethernet are Cat-3 (mostly just 10BaseT due to reliability issues at thigher data rates), Cat5, 5e, and 6.