Pull-ups are a compound upper body exercise that strengthens the upper back, shoulders, biceps, and core. There is a lot of coordination and control required to perform the exercise properly, but can be just as effective as barbell rows in strengthening the back.
There are many nuances to the form of the movement, but the following video should highlight the following segments of the movement: Active hang, Pull.
There are a large number of pull up variations that change the path of movement, the hand placement, the body orientation, etc. They are all effective in building the strength of the muscles named above. The other, equally popular variation of the pull up will be highlighted.
The chin-up differs from the pull-up in the hand placement. The bar is gripped underhand, and a little narrower in comparison. This off-loads weight from the back to the bicep.
This variation is done with a machine. The motion is similar to a pull-up, but a lighter weight can be selected, making the exercise a proper progression to a pull-up.