Runes are the armor upgrades of Guild Wars. Each piece of crafted armor can hold a single rune, for a total of five runes per character. These runes must be either general runes, usable by all characters, or specific to your primary class - runes cannot upgrade armor for a different class. In addition, multiple runes of the same type do not stack; if more than one is equipped, only one will function. At the moment there are relatively few runes available for each class.
To apply a rune, double-click on the rune and click on the armor piece you wish to apply it to. For the Rune of Holding, double-click on the rune and click on a bag. Runes of Holding do not stack either.