The preferential sphingomyelin-cholesterol interaction which results from the structure and the molecular properties of these two lipids seems to be the physicochemical basis for the formation and maintenance of cholesterol/sphingolipid-enriched nano- and micro-domains (referred to as membrane "rafts") in the plane of plasma and other organelle (i.e., Golgi) membranes. This claim is supported by much experimental evidence and also by theoretical considerations. However, although there is a large volume of information about these rafts regarding their lipid and protein composition, their size, and their dynamics, there is still much to be clarified on these issues, as well as on how rafts are formed and maintained. It is well accepted now that the lipid phase of the rafts is the liquid ordered (LO) phase. However, other (non-raft) parts of the membrane may also be in the LO phase. There are indications that the raft LO phase domains are more tightly packed than the non-raft LO phase, possibly due to intermolecular hydrogen bonding involving sphingolipid and cholesterol. This also explains why the former are detergent-resistant membranes (DRM), while the non-raft LO phase domains are detergent-soluble (sensitive) membranes (DSM). Recent findings suggest that protein-protein interactions such as cross-linking can be controlled by protein distribution between raft and non-raft domains, and, as well, these interactions affect raft size distribution. The cholesterol/sphingomyelin-enriched rafts seem to be involved in many biological processes, mediated by various receptors, as exemplified by various lipidated glycosylphosphatidylinositol (GPI)- and acyl chain-anchored proteins that reside in the rafts. The rafts serve as signaling platforms in the cell. Various pathogens (viruses and toxins) utilize the raft domains on the host cell membrane as a port of entry, site of assembly (viruses), and port of exit (viral budding). Existence and maintenance of cholesterol-sphingomyelin rafts are dependent on the level of membrane cholesterol and sphingomyelin. This explains why reduction of cholesterol level--either through reverse cholesterol transport, using cholesterol acceptors such as beta-cyclodextrin, or through cholesterol biosynthesis inhibition using statins--interferes with many processes which involve rafts and can be applied to treating raft-related infections and diseases. Detailed elucidation of raft structure and function will improve understanding of biological membrane composition-structure-function relationships and also may serve as a new avenue for the development of novel treatments for major diseases, including viral infections, neurodegenerative diseases (Alzheimer's), atherosclerosis, and tumors.