Crystals are used to control and stabilize oscillators at a particular frequency. The crystal oscillates at one frequency, which will help to keep the oscillator at that frequency. They are normally made from quartz, and are cut with respect to various axes of the mother crystal to produce different frequencies.
The equivalent of a crystal is shown above. The first capacitor, inductor and resistor represent the properties of the crystal. The second capacitor is formed by the two metal holders acting as the plates, and the crystal acting as the dielectric. The third capacitor is formed by the metal holders and the air gap between them.
Crystals are often used in digital clocks, such as in your watch. You may even see on it the word "Quartz" on the watch, which indicates that a quartz crystal is used. They are also used in some radio transmitters and receivers.
Some crystals that can be found in many electronic devices are shown above.