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CVS, or the Concurrent Versioning System, is a version control system. Version control systems are generally used as part of the software development cycle to track and co-ordinate source code changes among a team of developers.
For example, bugs sometimes creep in when software is modified, and you might not detect the bug until a long time after you make the modification. With CVS, you can easily retrieve old versions to see exactly which change caused the bug. This can sometimes be a big help.
You could of course save every version of every file you have ever created. This would however waste an enormous amount of disk space. CVS stores all the versions of a file in a single file in a clever way that only stores the differences between versions.
CVS also helps you if you are part of a group of people working on the same project. It is all too easy to overwrite each others' changes unless you are extremely careful. Some editors, like GNU Emacs, try to make sure that the same file is never modified by two people at the same time. Unfortunately, if someone is using another editor, that safeguard will not work. CVS solves this problem by insulating the different developers from each other. Every developer works in his own sandbox, and CVS merges the work when each developer is done.