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Card sorting is a simple tool for helping to design a navigational architecture. I think this quote sums it up best:
Card sorting is best understood not as a collaborative method for creating navigation, but rather as a tool that helps us understand the people we are designing for.
That quote is from the best book on the subject, Card Sorting by Donna Spencer, a freelance IA, writer, and speaker (http://bit.ly/dscardsort). This is a comprehensive and inexpensive resource, but you can also find a lot of the important information from Donna’s article on the web site boxesandarrows.com.
The thing to take away from that quote is “understand the people we are designing for.” The site structure and navigation must serve the people who will be using it. Imagine a library that has books organized by color, size, and thickness. This clearly will not help someone who is looking for a particular title or work by a particular author.