A nandroid is basically a backup of your entire phone. To do this you need to be rooted. Boot your phone into recovery mode (volume up, power and home, while your phone's off) and select backup and restore and then backup to internal or external sd. So say you flashed a Rom and got stuck in a bootloop you can boot into recovery mode and restore and it will put your phone back to where it was when the backup was made.
The efs folder is important to backup as it contains your imei info. Samsung devices have been known to wipe this folder on rare occasions when flashing so it's important you do. It's happened to me once after hundreds of flashes. It's easy to backup. Just use the backup efs option in this app
If you ever need to restore just use the app again.
There will be times when you need to factory reset your phone when flashing, either because the induction tell you or there are a few bugs after flashing. I use titanium backup with the paid pro keyfor this but there are other alternatives on the play store