The small bar indicates the range of prices during the time frame (for example, each bar could represent 15 minutes of trading on a 15 minute chart). The big bar shows the closing and opening prices for that time range. If the closing price is below the opening price the bar is red, and vice versa.
The red bar that shoots up from the bottom is the trading volume, and usually isn't covering up the bars so it looks strange. It just says a ton of BTC was sold in that time frame.
The chunk in the middle is the price for the majority of trades, and the lighter bar is all trades, if I remember right.