Plugins can extend WordPress to do almost anything you can imagine. To install a plugin to your WordPress site, you will first download the plugin, usually as a .zip file, extract the plugin and upload the named folder into the /wp-content/plugins directory on the server. Every plugin that you upload to the server will then be available to enable or manage through the WordPress admin page.
So what should you install? Well, there are thousands of plugins available in so many flavors and colors, so you should do some searches for features that you think might fit your blog best. You can find many of the best plugins through the WordPress Community Plugin Page. They have a built in search feature that will allow you to browse the over 13,000 plugins that have been uploaded to the WordPress community.
There are definitely some very popular plugins that you will want to check out. The most popular of which is the All In One SEO Pack. This plugin will automatically optimize your WordPress blog for Search Engines (Search Engine Optimization). Beginners or advanced users will find it very powerful, since it works out-of-the-box, or you can fine-tune everything to your specific needs.
And if generating traffic to your blog is important, you will also want to look into the Google XML Sitemaps plugin. This plugin will generate a special XML sitemap which will help search engines like Google, Bing, Yahoo and Ask.com to better index your blog. With such a sitemap, it's much easier for the crawlers to see the complete structure of your site and retrieve it more efficiently. The plugin supports all kinds of WordPress generated pages as well as custom URLs. Additionally it notifies all major search engines every time you create a post about the new content.
Another popular plugin is Akismet. This plugin is awesome for stopping those pesky spammers who love to fill your blog comments with their own ruthless advertisements. Akismet checks your comments against the Akismet web service to see if they look like spam or not and lets you review the spam it catches under your blog's “Comments” admin screen.
A simple but flexible contact form plugin is Contact Form 7. This plugin can manage multiple contact forms, plus you can customize the form and the mail contents flexibly with simple markup. The form supports Ajax-powered submitting, CAPTCHA, Akismet spam filtering and so much more.
If you want to include an image gallery, a good plugin is NextGEN Gallery. This plugin is a fully integrated Image Gallery plugin with a slideshow option. You can add custom templates for the galleries to match your WordPress theme and other effects.
There are so many fun and interesting plugins that you really want to check out if you are serious about having a well developed WordPress blog, so head over to the WordPress homepage and start searching for plugins that will enhance your blog now!