Inspiration Boards are simply collection of graphics that have a related theme. They are great when planning a project. You can grab images of things that inspire that project or objects you might like to use in such project. Inspiration Boards are great for planning, whether its for a party, a wedding, a room, or even a house.
There are lots of ways to do an inspiration board. They easiest is probably to copy and paste pictures from the web (or scan or your own photos) into a program like Microsoft Word or Powerpoint. If you have graphics program, like Adobe Photoshop, you could use it as well.
Or, you could try Polyvore. This site has a little applet you can install that lets you clip images to it. You can then use those to create an inspiration board or you can draw from the thousands of pictures that have been clipped by others. It's easy and fun. The interface is pretty simple and lets you search pictures by keyword, category, or even color. My only complaint about it is that it doesn't seem to handle photographs very well. Still its lots of fun. Here are some boards I did:
Ideas for a forest themed living room.
Ideas for renaissance Midsummer's Night Dream Wedding
If you are interested in trying out Polyvore, I've even started a group there for those of us into the Enchanted Life.