Right now I have the Epson Perfection 3200 Photo, but when I get time, I am going to but the Epson 4870 PRO model. Unique Photo in New Jersey has it for sale at $579.95. Just need the time away from work...
An IT8 target is either a print or a tranparency that has a set of specific colours on it as an image. These colours have known values associated with them. You take a scan of the target and use the calibration software to perform a comparative analysis of the scan to the what the values should be in RGB space. This information is then used to create a 'profile' of your scanner - which essentially, makes software corrections to ensure whatever you scan in the future will scan in colours properly.
Hope that helps.