Digital cameras perform somewhat poorly compared to film with the range that they can handle between the darkest and brightest areas in a scene.
To overcome this, some software called Photomatix (built into Photoshop or separately) allows you to take multiple images with different exposures and then compress the range between the brightest and darkest. This results in an image that shows exposure closer to what you saw with the naked eye.
Over-processing yields images that have an unrealistic or surreal feel to them and invariably the image has a flatter tonality to it.
In this image without HDR you would have an unnaturally dark foreground and church building (if you expose for the sun) or you would lose the color and details of the sun completely if you exposed for the foreground.
Combining digital photographs is now possible in all three dimensions: vertical or horizontal using Photoshop or PTGUI (to construct panoramas) depth (using software like Helicon Focus) plus this fourth one (that of exposure).