These Theses were all about the problem of indulgences, the selling of bits of paper, signed by the Pope, granting time off purgatory for you or a dead relative. As Tetzel (the indulgence commissioner for Germany) said "As soon as a coin in the coffer rings / the soul from purgatory springs." - Tetzel even had a price list for different sins, and allowed indugences to be brought in advance of a sin. The Pope used this money to build St Peter's Basilica in Rome. Indulgences 'removed' the need for repentance.
Luther, in his Theses challenges the right of the Pope to forgive sin, the whole Catholic Doctrine of Penance - that you could do certain things (give money, look at some relic, attend a Mass, go to confession and do some rosary prayers) and have your sins forgiven. Luther realised that those things did nothing, and gave false hope. He was still very Catholic at that point, but he was disgusted at the practises of the Roman Catholic church at that time - the defrauding of the pious in return for false assurance.
Here's Baldrick giving the Archbishop of Canterbury (Edmund the Black Adder) the run down of what the market is (sadly cut a bit short)...
Yes there were 2 Popes for quite a while, and both declared the other to be the Antichrist!
Luther joined in the fun - he circulated a pamphlet inviting people to come and look at some 'relics' he had - Theology Network has a list.
The main reason the 95 Theses were important is that, in order to defend his case, Luther had to read the Bible - the Pope took 3 years to respond, and by that time Luther's Theology had massively improved. He was a completely changed person by 1520, understanding Justification and not being rather scared (and bugging of his priest by confessing every tiny sin) - actually being a Christian. In 1520, Luther wrote "On the Freedom of a Christian" which opens:
A Christian is a free lord, subject to none.The 95 Theses aren't great in and of themselves, but what they started in Luther (searching the Scriptures) changed him, and then what Luther had learnt changed Europe, added to greatly by other's work (it certainly wasn't just him). Political things (like the Pope and Henry VIII not getting along due to Henry's wanting to annul his marriage as illegal), technological advances (the printing press), scholarly works (Erasmus' Greek New Testiment) and many other things all worked together to overthrow the captivity of people by the Church - stuck in Latin that many priests could even understand, or pronounce properly, stuck in false hope and also false fear. Tons of things worked together to return Biblical Christianity to the world (after a short absence - only in 1514 had there been a report to the Pope saying that there were no more Bible-believers, that they had finally been defeated), and it returned in a big way.
A Christian is a perfectly dutiful servant, subject to all.
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