Karma (at least as it applies on this website) works like this:
1.) Become a Gold Member.
2.) As if by magic (well, Mike's magic anyway) you will see two new options appear under other people's Karma ratings -- Applaud and Smite
3.) Clicking Applaud adds 1 Karma point to that person's Karma total
4.) Clicking Smite subtracts 1 Karma Point
5.) You can Applaud or Smite a person only once in a day
If Your Karma is in the mud, it is because you either angered or annoyed people enough to make them want to Smite you.
Why you may care is a matter between yourself and either your shrink, conscience, or the voices in your head. The only thing your Karma rating says about you is how other people on this site feel about your posts. It is up to you to decide if that is important or not.