In very simple terms, an IP is sort of like the address of your computer or internet router, like the address of your residence. It identifies the equipment so that information can be sent and received by your specific computer, like your residence address allows you to recieve mail that is sent to you, and not your neighbor.
Since an IP can sometimes be exploited to gain access to a piece of equipment (such as your computer), it is strongly suggested that you use a good firewall program and antivirus and anti-spyware programs (kept updated and run reguarly) to help prevent unscrupulouspeople from "hacking" into your system. These are not foolproof, so you should be sure to back up any important information that you keep on your computer, but taking these steps will go far towards protecting you from many invasive techniques used by people trying to get your information or cause you other types of trouble.
IrCQnet employs a system to "mask" or "cloak" or encode your true IP by giving you a "fake" IP on our network so that others cannot view your true IP. This system is set in place by default on IrCQnet. Not all chat networks use this.