Pythagoras' theorem states that in a right triangle, the square of the hypotenuse is equal to the sum of the squares of the other two sides. It introduces Pythagorean triples, where the sides of a right triangle have integer values that follow this relationship. The proof of the theorem shows that the areas of squares constructed on the sides of a right triangle follow the same relationship, demonstrating why the hypotenuse must be the longest side. The theorem is only applicable to right triangles.