This is a common-jargon walkthrough of an interesting Diablo 2 exploit. It provides the necessary background information (network protocol and game mechanics) to gain some understanding of the primitives from which it's constructed. Since the exploit is against a black-box network service with no available code, exact details and subtleties remain a mystery. :)
Diablo 2 items can have a list of properties with various effects. The most common items (normal or "white" ones) have very few possible effects; however, all items can have sockets. Rune and gem-type items can be inserted into sockets. Some sequences of runes are special - inserting them into a white item makes a runeword item with predictable special properties.
Here's an example runeword "Peace" created by inserting Shael, Thul, and Amn runes into a 3-socket Light Plate: