Is Tor just a browser? Or a free VPN?
If you mean the Tor Browser, yes, it is a browser. It is not a VPN.
What exactly is it?
Tor Browser is free software that helps you defend against traffic analysis, a form of network surveillance that threatens personal freedom and privacy, confidential business activities and relationships, and state security. Tor Browser allows both organizations and individuals to share information over public networks without compromising their privacy. Tor is an effective censorship circumvention tool, allowing its users to reach otherwise blocked destinations or content. Tor prevents your ISP or somebody watching your Internet connection from learning what sites you visit, Tor prevents the sites you visit from learning your physical location and your computer’s IP address, and Tor lets you access sites which are blocked. No Internet browsers, such as Firefox, Chrome, IE, Safari, etc., preserve users’s online anonymity. Tor Browser preserves users’ online anonymity and protects their privacy.
This Tor Project page describes some of the many different kinds of people using Tor, including everyday “normal people”, journalists and their audiences, activists and whistleblowers, lawyers, business executives, bloggers, IT professionals, students, retirees, military and law enforcement personnel, web surfers, and many others.
Just wondering if it protects browsing only, or everything online?
Tor does not protect all of your computer’s Internet traffic when you run it. Tor only protects your applications that are properly configured to send their Internet traffic through Tor. To avoid problems with Tor configuration, the Tor Project strongly recommends you use the Tor Browser. The Tor Project has pre-configured the Tor Browser to protect your privacy and anonymity on the web as long as you’re browsing with Tor Browser itself. Almost any other web browser configuration is likely to be unsafe to use with Tor.
Don’t torrent over Tor. Torrent file-sharing applications have been observed to ignore proxy settings and make direct connections even when they are told to use Tor. Even if your torrent application connects only through Tor, you will often send out your real IP address in the tracker GET request, because that’s how torrents work. Not only do you deanonymize your torrent traffic and your other simultaneous Tor web traffic this way, you also slow down the entire Tor network for everyone else.
Don’t open documents downloaded through Tor while online. Tor Browser will warn you before automatically opening documents that are handled by external applications. DO NOT IGNORE THIS WARNING. You should be very careful when downloading documents via Tor (especially DOC and PDF files, unless you use the PDF viewer that’s built into Tor Browser) as these documents can contain Internet resources that will be downloaded outside of Tor by the application that opens them. This will reveal your non-Tor IP address. If you must work with DOC and/or PDF files, the Tor Project strongly recommends either using a disconnected computer, downloading the free VirtualBox and using it with a virtual machine image with networking disabled, or using Tails. Under no circumstances is it safe to use BitTorrent and Tor together, however.