There are a few things that need to be cleared up in terms of common terminology used for traffic on your website:

1. "Hits" actually refer to the number of 'elements' loaded on your site. If one page has five images in it, viewing that page once adds 6 hits (one page + five images).
2. Impressions - the number of times all the pages on your site are seen (also simply called pageviews). Impressions are sometimes referred to as 'hits' too which can cause confusion.
3. Uniques - the number of people that visited your site.  This is the number most people want to be looking at for their reports to see how many individuals visited their site in a given time period. 

So to clarify, if I visit your website, look at two pages, and each page has 5 images on it, then your stats increase by one unique, two page views, and 12 hits. Tracking on your site can be either done server-side or remotely. With server-side statistics, log files are used to generate visitor information. This is usually much more accurate than remotely hosted solutions. In such cases, you usually have to add some javascript to your site. This javascript is then used to track visitor data. If your host provides it (and many do), server-side statistics are a good solution. Otherwise, companies like Site Meter can be used to remotely track your visitors.