Mods are modification of the main game including new blocks, new world generation, new ores, new entities, new galaxies, new trading systems, advanced inventory systems etc. They can manipulate every part of the game, so don't use mods from non trusted sources. They may use your idendity at the time you're playing.
Atm there ModAPI is just beeing built and can't really be finished before the beta at least is out, so relax, read some books, watch anime, until the really awesome thing of any game is waiting for you! Because of the need of an ModAPI I need to know which features are needed, so I need to write some mods for my game myself, which isn't that easy. Also it should be well documentated and easy to use.