This page covers the basics of three new tools: sculptmode, multires, and retopo. Sculptmode adds interactive mesh sculpting to Blender; instead of modeling by manipulating individual vertices and faces, users can now treat the surface of the model as digital clay, which can be manipulated with an array of brushes. Multires allows the user to interact with more than one level of subdivison on a model. Subdividing the model is no longer set in stone; the previous level can still be modified, and the changes will be propagated to the other levels. Retopo is a tool to remake the topology of a model. In combination with sculptmode, retopo can be used to quickly block out a shape, then create good topology afterward.
Example One: modeling a head
In order to get the basic shape for the head, we will quickly block out a shape in sculptmode. At this point, we're not worrying about topology, so you can start with pretty much any thing (a UVSphere, Icosphere, etc.) Subdivide if you want, but keep it fairly low-poly for now; no need to go detail-crazy at this point. Use the grab brush with a single axis of symmetry enabled to push and pull the model into a simple head shape. Once again, simple is OK; just try to get the outlines right.
Now that we have the shape, it's time to deal with topology. A model with good topology will have enough polygons in the areas you want to add detail, and if you plan to animate the model, you'll want to make sure to arrange edge loops appropriately.
To do this, add a new mesh (a Plane, for example) and delete all the vertices. Turn on the Retopo toggle button in the Mesh palette in the editing buttons. Use Ctrl+Click to add vertices to the surface of the low-poly head.
See Using Retopo for a full tutorial on retopo.