Jazz has explained things in detail, but I feel he's missed the basics, which you may be struggling to grasp.

Essentially what your basic CAM package does, is create toolpaths. You load a drawing into the CAM, tell it what size the stock material is, select what tool you'd like to use, and it creates a suitable toolpath.

The post processor then tells the CAM how to output that toolpath in a format that your machine will understand, which for Mach3 is reasonably standard G-code.

If you want to try things out, I'd suggest downloading CamBam, as you can open the software 40 times and use it as much as you'd like, before any restrictions are put in place/you have to buy a license. CamBam also includes Mach post processors, and I'd also suggest you download the CutViewer demo as it gives quite a good simulation of how things will be machined, and highlight any issues.