PRISM is a framework to develop composite application in WPF and Silverlight. Composite applications are built using composition. In other words rather than building application from scratch we take prebuilt components, assemble them together and create the application.
Take the below example of simple WPF UI. You can see it has lots of sections. Now rather than building the whole UI as one big unit, we can develop all these section as independent unit. Later by using PRISM we can compose WPF UI by taking all these independent units.
Benefits of PRISM:
As we are developing components as independent units we can assign these units to different developers and do modular parallel development. With parallel development project will be delivered faster.
As the components are developed in individual units we can plug them using PRISM and create composed UI in an easy way.