Seeking Alpha has a great article on why you should invest in index funds. I wholeheartedly agree and have about 40% of my portfolio in country-specific index funds. My intent is to increase that to 60-70% of my portfolio by adding additional index funds that track the major indices such as the S&P 500. Please note that I use exchange trade funds (ETF) because of their low expense ratios and other costs.
Wikipedia has some basic information on index funds that is worth taking a look.
Also check out CNNmoney.com which has a list of the best index funds for 2007.
etf, funds, index, investing, investment myths