Jessica Hulcy is considered
the expert on unit studies, and you can get an idea of what unit studies are all about by reading her articles:
http://www.home-school.com/Articles/#Hulcy
Basically, unit studies are a focus on topics rather than educational subjects. For instance, you might have a unit study on Rome that covered language, government, architecture, important historical events, etc, but the primary focus would be on Rome, not any specific academic subject. This makes it easy to teach children of differing educational levels using the same materials, since it's Rome for all, even if one person plays the orator and another a common soldier (togas are fun, but cardboard swords and shields are better!)