Simply put, a revocable living trust is a trust that can be "revoked" (terminated) by the grantor (the person who set up and funded the trust). A trust is classified as "living" when it is set up during the grantor's lifetime.
This basically involves filling out forms. For example, if Bob LeBob has a money market account at ABC Bank, the name on the account is now "Bob LeBob". A form provided by ABC Bank will allow Bob to change the name to "Bob LeBob, trustee, The Revocable Living Trust of Bob LeBob Dated (Date of Trust)". The money market account is then owned by the trust. On Bob's death, the assets will pass to his beneficiaries as designated in his trust, avoiding probate.
Yes. A will, referred to as a "pour over will" is still needed to serve as a back-up device if you forget to transfer some property to your revocable living trust. Example: Sally Cali sets up a revocable living trust. She transfers all of her assets to the trust. Several years later, she opens a new investment account and titles it in her own name instead of the name of her trust. Sally then dies. If Sally does not have a will, the asset not titled in her trust will be probated and passed to her heirs as decided by her state's law. Sally's account may be distributed in a way she would not have chosen. If Sally had a will, the will would likely say that after the asset goes through probate, it should "pour over" into her trust, being distributed in accordance with its provisions.