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Research on giant vesicles is becoming increasingly popular. Giant vesicles provide model biomembrane systems for systematic measurements of mechanical and rheological properties of bilayers as a function of membrane composition and temperature, as well as hydrodynamic interactions. Membrane response to external factors (for example electric fields, ions and amphiphilic molecules) can be directly visualized under the microscope. In this paper we review our current understanding of lipid bilayers as obtained from studies on giant unilamellar vesicles. Because research on giant vesicles increasingly attracts the interest of scientists from various backgrounds, we also try to provide a concise introduction for newcomers in the field. Finally, we summarize some recent developments on curvature effects induced by polymers, domain formation in membranes and shape transitions induced by electric fields.