<p>I've tried using source control for a couple projects but still don't really understand it.  For these projects, we've used TortoiseSVN and have only had one line of revisions.  (No trunk, branch, or any of that.)  If there is a recommended way to set up source control systems, what are they?  What are the reasons and benifits for setting it up that way?  What is the underlying differences between the workings of a centralized and distributed source control system?</p>

Think of source control as a giant "Undo" button for your source code. Every time you check in, you're adding a point to which you can roll back. Even if you don't use branching/merging, this feature alone can be very valuable.
Additionally, by having one 'authoritative' version of the source control, it becomes much easier to back up.
Centralized vs. distributed... the difference is really that in distributed, there isn't necessarily one 'authoritative' version of the source control, although in practice people usually still do have the master tree.
The big advantage to distributed source control is two-fold:
When you use distributed source control, you have the whole source tree on your local machine. You can commit, create branches, and work pretty much as though you were all alone, and then when you're ready to push up your changes, you can promote them from your machine to the master copy. If you're working "offline" a lot, this can be a huge benefit.
You don't have to ask anybody's permission to become a distributor of the source control. If person A is running the project, but person B and C want to make changes, and share those changes with each other, it becomes much easier with distributed source control.