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Okay - understeer is where when you go around a corner, the car wants to push straight.

Oversteer is where when you go around the corner, the tail comes out, so the car wants to go around a tighter line that what you intend (i.e. you spin).
 
Yes, and to add:

Understeer is due to the front tires breaking their traction first. Oversteer is [obviously] caused by the rear wheels breaking traction.
 
Pretty much - it's okay to have a little bit of either. Oversteer is quicker than understeer, because it means you can get the car turned into the corner more quickly (and therefore get on the power earlier).

The style of track can also mask or accentuate a particular handling characteristic. Best example of this: drive an Elise at Midfield Raceway, and then at Deep Forest, and see the difference.
 
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