The em is simply the font size. In an element with a 2in font, 1em thus means 2in. Expressing sizes, such as margins and paddings, in em means they are related to the font size, and if the user has a big font (e.g., on a big screen) or a small font (e.g., on a handheld device), the sizes will be in proportion.

Why should I use em?

em units should be used to allow for scalability within the context of a specific design element e.g. setting the padding, margin and line-height of menu items to use em values works well to properly scale navigation menu items.

Why do we use em instead of PX?

The main reason for using em or percentages is to allow the user to change the text size without breaking the design. If you design with fonts specified in px, they do not change size (in IE 6 and others) if the user chooses text size – larger.