Terpenes are aromatic compounds fount in the essential oils of plants, including cannabis. Cannabis is somewhat unique in it’s ability to produce a wide variety of terpenes, giving different strains their distinct smells – pine, citrus, blueberry, etc. On their own, terpenes have their own medicinal benefits: pinene, (pine smell) for instance, has anti-inflammatory effects.
The individual medicinal properties of terpenes, and the fact that their structure is similar to cannabinoid structure, creates synergistic effects with cannabinoids. Myercene, the most common terpene found in cannabis, has an anti-inflammatory effect and is able to lower resistance across the blood-brain barrier, allowing cannabinoids to take effect more quickly.
To maximize the benefits of terpenes, they should be ingested below their boiling point, which range from 310-390 degrees F.
dPan provided a great answer! As he or she mentioned, terpenes are what contribute to all the different aromas (and sometimes flavors) that this amazing plant has to offer. As you become more familiar with some of the different terpenes out there you will start to recognize which smells tend to relate to certain terpenes. For example, limonene, as you can probably guess, gives off a citrus like aroma. As dPan mentioned, pinene tends to give off an aroma that reminds you of pine trees or pine resin.
In terms of synergy between terpenes and cannabinoids, dPan really hit it on the head. They work together to create somewhat of an "entourage" effect.
All that being said, we’ve only begun to really understand the science behind terpenes, cannabinoids and all the other aspects of cannabis. We still have a long way to do!