First, the backslash. LaTeX uses the backslash before most commands, so you should get familiar with its location on your keyboard. The brackets contain options that change something less drastic than the document style. For instance, you can change the type size from 10 point to 11 or 12 point, set the entire document in two columns, or use other more advanced options. The braces and their contents are required.
Letters are unique among the styles.
You may want to write several letters in the same file, reusing the same return address and signature. The argument in the second set of braces is the address of the recipient of the letter. Note the recurring double backslashes and the tendency to put arguments in braces to set them apart. The other options are mostly self-explanatory from the example letter. This is a very short letter.