No, it's not some mystical force of the universe that restores balance, punishes evil-doers, and rewards the meek. Two examples of real Karma, one small, one bigger:
I live in a duplex. When i first moved in, my neighbors (who i hadn't even met) took out my trash can for me. Once i started to get it into my head that Tuesdays were garbage day, I'd put out my trash, and if it hadn't been done, I happily roll out my neighbor's trash can. Their Karma is being repaid.
A friend went through some financial troubles in college, and the financial aid office was able to award her a no-strings scholarship from an anonymous donor. She has always been thankful for that help, and (years later) has made generous grants to that same scholarship fund, even though she still has to watch her budget overall. The Karma flows (in this case, in reverse -- her giving a kind act coming after her receiving a kind act).
Thus: Karma is a real social/psychological reaction: If you go around willing to help people -- putting nickles in expired parking meters, helping friends move, and taking time to be friendly -- those people will be a bit nicer to others (if nothing else, less embittered), and are themselves more willing to help others. In turn, these people are your community; you're liable to run into them (or those they've influenced), and you end up with a healthy community.
Of course, there is negative karma as well: times when i've needed help and been turned down or ridiculed, makes me less willing to help others. Actually, sometimes just the perception that people won't help me makes me less inclined to stick my neck out for anybody else. Thus, the difficult part of karma is that it needs a small amount of energy to keep going: If I take the initiaitive to be kind in small ways, without expectation of returned favors, only then do I help karma flow around my community, returning to me unexpectedly.
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