We eventually transitioned into a deep-dive of how communities will work. Everything that follows is my understanding of a fairly complex technical conversation that we had a few days ago. It should be fairly accurate, but I just want to throw a disclaimer that some of this may be slightly off from what Steemit actually plans to implement. Also, I'm sure Steemit reserves the right to change any/all of this during their implementation.
Communities are going to drastically change the platform.
Right now, all Steemit content is presented to users through a 'fire-hose'. Everything all at once, either through the trending page, new/created page, or a user's feed. Users are all competing for a brief glimpse of attention before their post is shoved off by the thousands of other posts shooting through the hose. Communities are going to change all of that.
The Steemit homepage is going to consist of a handful (probably around 20) pre-selected communities, which are the defaults. These communities will be broad topics that appeal to wide audiences, such as news, gaming, music, funny, etc. Users will have the ability to keep the defaults selected, or chose different communities that are more tailored to their personal preferences. Users will be able to drill down into any of the communities to browse the content within them. Users also may be given the option to follow a community.
At a technical level, a community will start out as a 'regular user' account and will be converted into a community. The reason for this is so that communities can eventually share in the revenue from the posts that are created within them (more on this later). When a user creates a post within a community, it will still be posted under their own account on the blockchain, but it will have JSON that designates it as part of a community. Hivemind (a new back-end application layer that is being built by Steemit) will interpret all of the data to determine how the post is handled for the communities.