Samba is an open source application that allows file and printer sharing between Windows and Linux/Unix machines using the SMB/CIFS protocol. It provides services like file sharing, directory services through protocols like LDAP and Active Directory, and user authentication. While Samba simulates a Windows domain controller, it actually works like a Windows workgroup by default. Benefits of Samba include being free, open source, and allowing easier networking between Windows and other platforms. Maintaining compatibility with Microsoft's SMB implementation remains a challenge.