I'll break down a more complicated lens so that you can see what all the parts you might encounter mean. The example lens will be the EF 70-200 f/2.8L IS USM
EF: electro-focus, or what Canon calls their autofocus lenses. All EF lenses will work on all Canon digital SLRs. Some other names you might run across include FD or FL, which are the branding for some of Canon's older, manual focus lenses. These will not work on any Canon digital SLR.
70-200: the focal length, which tells you what sort of image the lens will produce-- whether it be wide or telephoto. If you think of your 18-55 as 'normal' then smaller numbers will be wider, larger numbers bigger.
f/2.8: this is the maximum aperture, that is, the amount of light that the camera can let in. The smaller the number, the larger the opening and the more light that the camera can let in, hence, the darker the situation it can be used in. For example, a lens with a max aperture of f/2.8 can let twice as much light as a lens with a max aperture of f/4. The amount of light doubles or halves in 'stops' that go something like so: 1.0, 1.4, 2.0, 2.8, 4, 5.6, 8, 11, 16, 22 (I think I've got the upper numbers right here, but you get the idea). The listing on the lens is only the maximum aperture, most lenses can be used at anything up to f/22, and some can stop down further than that. Some zoom lenses have what is called a variable aperture, meaning that they have a different maximum aperture at different focal lengths. This is true of your 18-55 lens, for example.
L: This is Canon's moniker for their professional series lenses that are generally of a higher quality than their consumer grade lenses (though this is not a hard and fast rule). They are set apart by better build quality, bigger max apertures, generally better AF, weather sealing on occasion, a trendy red ring, and higher price. They also tend to weigh a lot more (b/c of the build quality). You don't need an L lens to get good optical quality or an overall good lens, but a nicer lens will generally prove more useful. For some things, an L is your only choice (super telephotos, for example).
IS: Image Stabilized, what Canon calls their lenses that have gyros built in to compensate for camera movement on longer exposures. It does not have any effect on subject movement.
USM: Ultra sonic motor, Canon's term for lenses that have faster, silent AF motors that also provide full-time manual focus. USM is also more accurate and reliable.
The way to pick a lens is to figure out what it is that you want to shoot, and what you feel like you're missing in your kit lens. Do you find that you want to be able to get shots from farther away, or closer up? Do you feel like you need a lens that can work better in low light? What is your budget? Answer this question and you'll probably be able to figure out what lenses to look at.