As Google says: "Have a website or collection of sites you'd like to search over? With Custom Search Engine, you can harness the power of Google to create a search engine tailored to your needs." What one can do is list some websites, and Google will constrain searches to return pages only from the listed sites.
For example if you know of a select few sites that really cover a specific, a custom search engine lets you focus searches on just those sites. This is an extension of their "site:xyzzy.com" search modifier which limits the search to one site.
There is an example search engine at: http://recipeclues.com/
It is trivial to create a simple search engine. First you must have a Google account, which you can create from the CSE page. Once logged in there is a link named 'New Search Engine' and you'll be taken to a page which makes it very simple to create the search engine. You give a name for the search engine, a couple parameters, and a list of websites. That's it.
You can add more sites, or delete old sites, at any time.
There is an area within the CSE site to manage your search engines. The control panel allows you to do: Basics | Sites | Refinements | Look and feel | Code | Collaboration | Make money | Business Edition | Advanced | Preview