When using a transparency mask, the effect is that the artwork underneath changes due to the black areas of the mask hiding the image and the white areas exposing the image. Here we have an colored background. I've placed a symbol that is black and white on the top.
Step 3: With both your image and text selected go to Object > Clipping Mask > Make and that's it - you're done! The text is acting as a mask and you can see the image through the letters.
A mask is a vector path which allows part of an object to show while blocking out the rest effectively making part of it transparent. A mask in an illustration program is functionally equivalent to a clipping path in an image editor.