Lager means to age.
When you lager a batch you usually are doing it a lower temperatures. This affects the length of time required to get a full fermentation and it also affects what the yeast contributes to the beer. Lagering usually prevents the yeast from producing esters, and fermenting at warmer temperatures runs the risk of having the yeast contribute esters to the flavor of the beer.
I've started outside the fridge, and I've chilled the wort down to 58°F after the boil and pitched a 42°F starter into it with the same results from each. I usually keep the yeast within the temperature range posted on the package, that's the best rule of thumb. After primary fermentation is done, you can drop the temperature down to the mid-30s (°F) and lager it there for a few weeks.
This is a very important part of Palmer's site to read:
http://www.howtobrew.com/section1/chapter10-4.htmlIt talks about a diacetyl rest. You probably don't need to worry about this when you're making your first batch or two, but if you taste diacetyl, this is where is may be coming from and how to prevent it.