A Man in the Middle attack is just what it sounds like. A third party sits between the sender and receiver and manipulates the data before passing it on. For example, if Server A is sending a packet to Server B, the MitM client will receive the packet first, and using some clever filtering tools, will modify specific data within the packet, and then pass it on to Server B.
For example, as a prank for April Fools one day, we made rules to look for our co-workers name, "John Doe", or "John" or "Doe" and we replaced it with "Rick Astley", "Rick", and "Astley". We then found the URL for his facebook profile picture and wrote a rule that said when a packet appears with THIS address, replace it with THIS, which was the URL for a picture of Rick Astley. Every time he logged in to Facebook, it would display the Rick Astley picture instead of his and replace his name with Rick Astley's name. The only way we could do this was on our Gateway, beause our Gateway can see everyone's Internet traffic (it won't work on a switched network without some trickery, like ARP poisoning).
At any rate, a real easy tool to use is called Ettercap. Just google for Ettercap tutorials and you can find some easy to do examples.