A
circular section of double-stranded
DNA found in bacterial
cytoplasm. Plasmids code for
proteins responsible for all kinds of
cellular processes --
reproduction,
defense,
repair, etc. They're not a part of the cell's
chromosome, though, as they reside outside the
nucleus and are reproduced and
exhibited without nucleic mechanisms. Plasmids are like free-floating
information in the cell, and whether or not that information is helpful to the cell determines whether or not the plasmid will be passed on to
future generations. Bacteria without useful plasmids, or with dangerous
mutant plasmids
die, while bacteria with the right combination for the given environment
survive.
Plasmids are cool because they allow for natural selection to take place on a much faster time frame than with just chromosomal change. Think generations instead of millenia. They are also pretty neat in that they're as close as nature gets -- well, perhaps besides meme theory -- to pure information that is alive. Plasmids don't have reproductive functions, defense mechanisms, respiration, or any of the other hallmarks of life. They do, however, reproduce (via transcriptase and the rest of DNA reproduction), and their suitability to a given environment determines their ability to reproduce further, by determining their bacteria's likelyhood of survival. Thus they are, in a way, information that is alive.
For example, one type of plasmid is responsible for the proteins which make a connection between two bacteria in which genetic information can pass. That is, one of the bacteria has that plasmid, but may not have others that would be useful for its survival. That cell exhibits the plasmidic information, and connects to another cell. Once connected, plasmids from both cells can intermingle, leaving each cell with all of its own information, plus that of the cell it just connected with. Since both cells have survived thus far, it stands to reason that they exchange information enabling continued survival. Both cells become better for having exhibited that particular plasmid, and the connection plasmid now exists in in two bacteria instead of one.
Plasmids are used in DNA cloning, which allows scientists to make bacteria that produce a needed protein. This allows for proteins to be "manufactured" in any quantity needed.