An octave is an interval between (and including) two notes, one having twice or half the frequency vibration of the other. In simple terms this means that octaves are the same notes, but higher or lower.
The two notes that make up an octave are the same note (ie, G and G) but one will be higher or lower than the other. You can hear an octave by playing an open string and then playing the same string at the 12th fret. That is an octave, because the notes in an octave are 12 semitones (frets) apart. One complete lap of the Note Circle.
Because of this, you can use octaves to find the notes on the middle strings of the guitar (the most difficult to remember for everyone). As long as you know the notes on the bottom two strings (which you will need to to know your Power Chords and Barre Chords) then you can work out all the rest.
For example, to find a note on the 3rd or 4th string, simply put your third finger on the note you want to know and put your first finger in the relative position shown by the diagrams above (in this case two frets back and two strings over). The note under your first finger will be on the 5th or 6th string and you should know the note name!
To get a note on the 2nd string you have to use the third shape shown and put your first finger on the note you want to know and stretch out your third finger to the 5th string note that you know.
The first and 6th strings have the same notes all the way up, so they are pretty easy.
Simple or what?
And now you can find any note on the fingerboard just by knowing the notes on the bottom two strings (if you don't know them by now - get busy - you need to know those notes for just about everything: barre chords, scale shapes etc.)
The 3 shapes used for finding the notes using octaves are shown below: