"In topology, knot theory is the study of mathematical knots."
This is how Wikipedia defines knot theory. I have no idea what this is supposed to mean, but it does seem interesting. The rest of the article is full of examples of knots, their notation and such, which I understand a little bit better, but I still fail to understand why and how they are studied. So, what exactly is knot theory about?
What characteristics of knots are studied, and how does it connect to the rest of mathematics? Full disclosure: I have experience with analysis, know at least the basics of abstract algebra, and I think I could understand elementary topology. So feel free to give me only a moderately technical description.

A knot, for our purposes, is a (well-behaved) "loop" in 3-dimensional space. Mathematically speaking, we could think of a knots as (injective, differentiable) functions from the unit circle to $\Bbb R^3$ (or equivalently, the image of this function in $\Bbb R^3$). Without losing any real structure, we'll suppose that these loops fit inside the sphere of radius $1$.
That's the easy part. Now, the tricky bit: what does it mean for two knots to really be the "same knot"? Intuitively, we'd like two knots to be the "same" if you can strech/squish/twist one to make the other without "tearing the rope" or passing the rope through itself. The way we encode this mathematically is to say that two knots are the same knot if they are ambient isotopic (or, for a weaker condition, ambient isomorphic). In particular, two knots $K_1,K_2 \subset B$ ($B$ is the closed unit ball) are ambient isomorphic if their complements $B \setminus K_1$ and $B \setminus K_2$ can be continuously deformed from one to the other (they are ambient isomorphic if these complements are homeomorphic).
Note: It is not enough to check whether two knots are homeomorphic, since all knots are homeomorphic to the unit circle. I believe that ambient isomorphism implies ambient isotopy in this case, but I'm not sure.
With that, the central knot theory questions are
Another helpful way to think about knots is in terms of their knot diagrams. In particular: we take a knot, look at its projection onto a suitable plane, and keep track of all over/under crossings. It turns out that two knot diagrams correspond to the same knot if and only if one can get from one diagram to the other using Reidemeister moves.
So, how do we tell knots apart? Usually, we do so using knot invariants, properties that a knot retains no matter how exactly it's stretched, twisted, or smooshed. For example, we know that the trefoil is distinct from the "unknot" because the trefoil is tricolorable, but the unknot isn't.