Yeah OSGi can be rather hard to make sense of . I think it is primarily because it is hard to relate it to web application development, which is what many of us do.
I don't know enough about it to explain it to you, but you might find the following helpful -
OSGi: The Foundation, a presentation by Peter Kriens, OSGi Director of Technology. It goes into detail about how it started (I think in 1998), evolved over the years, and where it is going now.
OSGi & Spring In-depth with Adrian Colyer. Adrian Colyer is CTO for Interface21, and offers his perspective, which you may find useful if you mainly work in J2EE technologies. [ November 22, 2007: Message edited by: Sonny Gill ]