If you're literate you can read and write, and since you're reading this, that's what you are.
Literate can also mean more than just being able to read and write, but being really fluent in a field. If you're "computer literate," you know how to use a computer with ease. If you're up on the latest advances in science, you're "scientifically literate." If people describe you admiringly as literate, they think you're widely read and know a lot about lots of different fields. The opposite of literate is illiterate.