I've been asked to do an overview of Dianetics, and I wanted to start by reiterating that I have written a few posts on this already so, if something doesn't make sense, please check them out or comment. Another great resource is the Dianetics website.
Here's what L. Ron Hubbard has to say about Dianetics:
"The history of Dianetics would be the history of a voyage of discovery, of an exploration into new and nearly uncharted realms, Terra Incognita, the Human Mind, a land which lies an inch behind your forehead."
I've spoken earlier about the mind and about engrams, but I haven't really talked a whole lot about how Dianetics works.
The basic idea is that you have two parts of your mind, the analyzer - which records your conscious thinking and memories and aides that thinking, and the reactive mind - which records unconscious memory. When some situation similar to a painful or unconscious experience you've had before comes up, you begin to think illogically, using your reactive or stimulus-response mind.
Dianetics allows you to look at those painful experiences and memories. It allows you to then move them from the reactive mind to the analytical mind, where they no longer cause you to react in a stimulus-response manner - rather, you respond rationally. Once you've completed this process, you have achieved the state of Clear. You can reason with your analytical mind without any unnecessary stimulus response reactions getting in your way.
There is a ton more data on this with great examples and real-life experiences in the Dianetics website, but that's the basic gist. Any questions?