Niche D20A creature with resistance to elemental damage has the ability to ignore some damage of a certain type per attack, but it does not have total immunity.
Each resistance ability is defined by what Affinity type it resists and a number to indicate power of resistance. The numerical value of the resistance (such as Resist 1 Fire) indicates the bonus to Saves the creature has against spells and effects with the associated elemental affinity. In addition you also reduce the damage of the associated damage type of the resisted affinity by 5 points (as such Resist 3 Fire would reduce incoming fire damage by 15 points); this only applies to sources from spells.
Resistance from multiple sources do not stack and the greater of resistance values is instead used unless specified otherwise.