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I installed a plugin. The only option to use it is to place this code in a CMS page: {{block type="ve_easyslide/list" template="ve/easyslide.phtml"}}.

Firstly, what are these blocks of code called and what does it do?

Secondly, how could I use this in a static block? When I try and put it in a static block now it just displays the code on my site.

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It's called magic variables.

{{block type="catalog/product_list" template="catalog/product/list.phtml"}}

is equivalent to layout's XML:

block type="catalog/product_list" template="catalog/product/list.phtml" /

that you can find in catalog.xml in example. Type attribute points to class - in this example it's:

Mage_Catalog_Block_Product_List and template, well, points to template file :)

You can use the same code in static block but be sure to insert the code while WYSIWYG editor is off.

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