$vars array

I am a bit confused with the $vars array. Is it an object e.g $vars['user']->guid ? also I have seen the variable used on any php script in the API as if all the scripts were included into one file so that the $vars array's values can be referred to from any script. Can someone please explain this I know it's a simple issue but I am new to the elgg framework. I would appreciate any form of help thanks.