Joomla is it a menu, or is it a module - or is it both?

I'm confused...

When I want a new "menu" ...and by menu I mean - a block, box, confined area, whatever - with links inside of it

Do I....

#1 - create a new menu
#2 - create a new module
#3 - create a new menu that if I enter all the information then Joomla will create a new "module"

In short - what's the difference in the menu/module thing?

I know I can't add links to the module - so what am I missing?

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