A pad is a synthesizer patch for playing harmonic backdrops that are similar to the role that in the "old" days would often be played by string sections in popular music. They typically have slow attacks, long sustain, and are often airy or "gauzy." They are poor for playing melodies because of the blurry articulation, but great for long sustained chords.
C7sus also wrote of MIDI and audio but I'll add a bit to what he said. When you record music on a computer, there are two basic ways to do it. One is to use MIDI synthesizers and record the MIDI data that causes them to play whatever it is you want. As C7sus said, like a glorified player piano. The other is to record actual sounds themselves. This is accomplished by converting the analog signal from a microphone or other analog source into a digital representation that can be recorded onto the computer's hard drive. Sure, audio means the sound you hear, but in the realm of digital recording it also means this kind of data. When you say a software application records audio and MIDI, it means that you can record both MIDI data and audio data within the same application. To be played back by others, you typically need to mix everything in your musical project -- audio and MIDI -- down to a stereo audio file so that it can be recorded to an audio CD.
To understand filters and oscillators, you need to understand the basics of waves, what frequency, wavelength, and amplitude mean... there are plenty of good books, magazine articles, and websites that can enlighten you in case you need that info.
