If you login to WordPress you have two big options in your administration dashboard: "Write a new page" and "Write a new post".

The thing here is that in version 2.6. of WordPress the order of those two changed, first it was the Post and then the Page...
Looks like WordPress is heading to a more CMS Like software, most currently if we look at the new 2.7 Dashboard.

But one thing remains, Pages and Posts...

It is simply a matter of knowing what to use for what purpose.

WordPress Posts

Posts are really what makes WordPress so great for Blogging, Post will be presented in a time-line.
This means that the latest post will show up first before the rest of the Blog entries.

Posts can also be attached to categories, pages can't (unless we use a special Plugin)

In the archive pages there will be Posts that are labeled to belong to those Category or Tag.
You can also have Monthly archives and even Author Archives, but the are always in a Chronological order.

WordPress Pages

Pages are more static and that means you can use them any way you want to structure your WordPress website.
Pages are the way to go if you want to Build a Static WordPress website

There is a great Plugin called My Page Order that can help order your pages.
Pages can also be placed as a subpage to a Main page.

Managing page orders is with this Plugin as simple as dragging and dropping, but don't forget the hit save afterwards...