Good description Mr Rockets

OP if you are still confused then do a search - this has been asked before and pictures of before and after have been posted.

By the way the top cap is not there just for decoration (as i initially thought ), look on Sheldon Brown's or Park Tools web site to see the order to tighten the bolts. You can end up with a loose or over tightened headset. Someone here should be able to enlighten you.