The hexadecimal number system has 16 digits:

    Hex digit: 0 1 2 3 4 5 6 7 8 9  A  B  C  D  E  F
Decimal value: 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

To figure the decimal value of a hexadecimal number:
Step 1:Let N equal the value of the leftmost hex digit. Cross out this hex digit.
Step 2:If there are no hex digits left, STOP. The result is the current value of N.
Step 3:Increase N by a factor of 16. (Why 16? Hexadecimal is base 16)
Step 4:Increase N by the value of the leftmost hex digit. Cross out this hex digit.
Step 5:Go to Step 2.

Example: Convert 0xD5C0 to decimal.

The "0x" at the beginning is not part of the number. It just means that what follows is a number in hexadecimal.

  Hex     Value
digits     of N    Step   Explanation
------   -------   ----   -----------------------------
 D5C0                     START
  5C0        13      1    Value of D is 13,
                            Crossed out D, set N=13
  5C0        13      2    Keep going
  5C0       208      3    13*16=208, set N=208
   C0       213      4    208+5=213,
                            Crossed out 5, set N=213
   C0       213      5    Go to step 2
   C0       213      2    Keep going
   C0      3408      3    213*16=3408, set N=3408
    0      3420      4    Value of C is 12, 3408+12=3420
                            Crossed out C, set N=3420
    0      3420      5    Go to step 2
    0      3420      2    Keep going
    0     54720      3    3420*16=54720, set N=54720
          54720      4    54720+0=54720
                            Crossed out 0, N still is 54720
          54720      5    Go to step 2
          54720      2    STOP. Result = 54720.

However, if it is just a 2-digit hex number, the formula is VERY easy: ((first digit) * 16) + (second digit)
Examples:
0x37 = 3*16+7 = 55
0x8F = 8*16+15 = 143 (Remember, F in hex means fifteen. See table of hex digits.)

Hexadecimal is often used because numbers in computing come out even in hexadecimal more often than in decimal.

1 kilobyte = 1,024 bytes = 0x400 bytes
1 megabyte = 1,048,576 bytes = 0x100000 bytes

Hexadecimal is often used in reference to the RGB color code.