Iteration with Regular Expression

Hey all, I have a quick question about some code in ruby I am learning.

Here is the code:

"This is a test".scan(/../) { |x| puts x }

In return I get:

1.9.3p392 :002 > "This is a test".scan(/../) { |x| puts x }
Th
is
 i
s 
a 
te
st

This is what I expected. .scan is a method and is "scanning" through the string looking for matches from the original expression "This is a test" passed to it. In this case, the (/../) is looking for two letters at a time.

I don't quite understand the { |x| puts x } . What exactly is this? From reading I know that this is called a block and it is fed information, but I really don't know what that means? I supplemented "x" with y, c, and even the word number and got the same exact result as above. When I take out { |x| puts x } I get:

1.9.3p392 :006 > "This is a test".scan(/../)
 => ["Th", "is", " i", "s ", "a ", "te", "st"] 

From what I know about Ruby so far, this looks like it is breaking the initial string "This is a test" into 2 letter individual strings. It is also not putting them on separate lines. So the { |x| puts x } may have something to do with creating a new line?

Any information would be greatly appreciated, thanks!