Media as a field means that you can create a media field for a node just like you have a title field or a body field or a tags field. The media you select in the field will be attached to the node, and will be displayed when the node is displayed.
Creating a Media field on a content type
Now we'll add a Media field to our built-in Article content type. Go to the Content types overview page at /admin/structure/types, and click the 'Manage fields' link for the Article type, which brings you to /admin/structure/types/manage/article/fields. Add a new field, called 'Media', by selecting the 'file' or 'image' field type from the appropriate selector. (Make sure to fill in both the name and label.) Select 'Media file selector' widget.
(Side note: 'Multimedia Asset' field type is deprecated in 2.x. See: #1201936: Move the media field to a non-required submodule)
Save the resulting Field settings without changing anything. On the next screen, you'll also see Allowed Media types, which selects 'Image' by default and 'Public files' and 'Private files' URI schemes. Leave these alone for now.
Upload a media file
Go to the Media content listing page, by clicking on the very top 'Content' link and clicking on the 'Media' tab (which brings you to /admin/content/media/list). Then click on the 'Upload new files' link and upload an image.