Good god... I will try my best. *smile*
Citrix is like mail and web server. It is an application that act as a server. But if mail server provide mail services, and web server provide web services, citrix provide application sharing and centralization. But it shares things differently from file server which provide file sharing.
Without citrix. MS Office will have to be installed on each pc and hence runs on each pc.
With citrix, ms office is installed once on the server, all pc needs only to install an agent of citrix and any application runs on the citrix server the pc can access regardless of hardware constraint and a more flexible choice of os (you can run ms office 2007 on linux!) because everything runs on the server.
This is possible because with the help of the citrix agent on each pc, citrix transmit only the screen changes to the pc instead of the data and all the commands like a regular client server scheme. In some extreme cases, a pc with no harddisk could run just fine (they are called thin client).
This architecture however doesn't change most license scheme. So even though only one copy of ms office is installed on the server, if there are 40 pc with 40 citrix agent accessing it you're still obligated to purchase 40 ms office licenses.
Hope this helps...