Stonehenge is one of many rings of standing stones built by the ancients in Britain, begun sometimes between 3000 and 2500 BC. More is known about Stonehenge in particular than other stone circles, in part because they are so well preserved, and also because real archaeological work has been done around it.
“The first Stonehenge was a large earthwork or Henge, comprising a ditch, bank, and the Aubrey holes, all probably built around 3100 BC. The Aubrey holes are round pits in the chalk, about one metre wide and deep, with steep sides and flat bottoms. They form a circle about 284 feet in diameter. Excavations have revealed cremated human bones in some of the chalk filling, but the holes themselves were probably made, not for the purpose of graves, but as part of the religious ceremony. Shortly after this stage Stonehenge was abandoned, left untouched for over 1000 years.” http://www.stonehenge.co.uk/history.php
“Around 2100 BC the Preseli Bluestones were brought from West Wales and erected in a circle (the X and Y Holes) also aligned to the summer solstice, and a widened approach was constructed. Around 100 years later, this first Bluestone circle was dismantled and work began on the final stage of the site. The Bluestones were rearranged in the horseshoe and circle that we can still see today. The next phase of Stonehenge saw the arrival of the Sarsen stones which were arranged in an outer circle with a continuous circle of lintels. On the inside of this five trilithons were placed in a horseshoe arrangement, part of which we can still see today. Since that time, Stonehenge has been systematically destroyed and recreated by various peoples throughout history. The most recent reconstruction took place as late as the 1960s. The only way an accurate picture can be visualised of a complete Stonehenge is through the plan of the holes in the ground.” http://www.britannia.com/history/preseli_blue.html
Stonehenge appears to have been a burial ground and as it is oriented with the soltice. It is also likely that it was some kind of ceremonial site for the people of the time.
More recently, archaeologists have uncovered evidence of 33 homes approximately 2 miles from the site, giving them some idea of the people who lived near it: http://www.boston.com/news/world/europe/articles/2007/01/31/dig_uncovers_stonehenge_peoples_settlement/
The article states: “The discovery suggests a striking new portrait of Stonehenge as just one part of a broader, interconnected religious site devoted to honoring ancestors and celebrating the cycle of life and death symbolized by the seasons. Durrington Walls, the archeologists said, was a place for the living, and is littered with animal bones from midwinter feasts. From there, they suggest, people may have walked to the river Avon on the stone boulevard, traveled down the river, and then up a similar boulevard to Stonehenge, whose great blocks probably served as a permanent memorial to those who lived before.”
Heritage key has created a virtual tour of the site here: http://heritage-key.com/stonehenge
Or, you can buy your own desktop version from ThinkGeek: