Well I'm a bit of a LOTR nut, and The Silmarillion is by far my favourite book.
So here's what's up; The Silmarillion is a collection of "books" or "parts" that explain how the world began with "The One" who created the gods (Valar and Maiar), who then all worked together to create the world in it's entirety (Beleriand, Middle-Earth, etc.).
The story explains how one of the gods (the most powerful one) goes rogue and decides to take over, and he becomes the antagonist of the novel (Sauron was his number one minion).
What follows is how the elves live in Beleriand (the land to the west of Middle-Earth; it eventually becomes broken by war and disappears) and how they cope/battle with the rogue god (Morgoth), his followers, and with themselves. Later on, the race of men (the second-born) join the party as well. Stuff happens, you can read the rest.
All in all, the Silmarillion concerns the shaping of the world, as well as the history of the elves and of the ancient races of men. It's chock full of great stories of battles and legendary persons. The history about the entire world is, for me, the best part. You learn how things came to be in Middle-Earth, what the elves were like in their glory days, how the races of men were and such.
And I would love to chat about it at any time, PC. Feel free to pm me, and thanks for starting this thread!