so i jail broke my iPhone 3g. i have a few questions
1. what is this installer icon and what does it do?
2. what is the cydia and what does it do?
3. where do i download the cool things (games,wallpapers for home screen,apps etc.?
All of your questions really have the same answer. Cydia and Installer are both like the AppStore, but for jailbroken iPhones - note that the AppStore still works. Installer, though, is not worth using. It's slow, buggy, and doesn't have much to offer. Cydia, however, works pretty well, has a lot of good stuff in it - including the games, wallpapers, & apps that you're looking for.
Search through our iPhone Modifications forum - it's filled with information on the things you can do with a jailbroken iPhone that you can't do with a stock phone.