Portage is the system Gentoo Linux uses for installation of software packages from source code. It is similar to the BSD ports system, but has a number of advantages. From the gentoo webpage:
Portage is a true ports system in the tradition of BSD ports, but is Python-based and sports a number of advanced features including dependencies, fine-grained package management, "fake" (OpenBSD-style) installs, path sandboxing, safe unmerging, system profiles, virtual packages, config file management, and more.
Portage's configuration options are controlled by /etc/make.conf. This file contains definitions for architecture, CFLAGS, and CXXFLAGS, as well as which server to get portage updates from, and where to download sources.
The default download application is wget, but you can also use others such as prozilla. Portage is usually updated via rsync, but can also be kept current using CVS.
Portage uses a tool called "emerge" to control the building of packages; Emerge actually calls "ebuild" to carry out the various functions, including updating the md5 digest, unpacking the source, patching it, and so on.
References:
Webpage: About Gentoo Linux. (http://www.gentoo.org/index-about.html)