via Customizing the Read More « WordPress Codex.
The Excerpt Basics
Excerpts show up on WordPress through two methods. One, by replacing the template tag the_content() with the_excerpt(). Then the explicitexcerpt you have entered in the Administration > Write > Post SubPanel will appear, or the first 55 words of the post’s content. Users can then click on the title to continue reading more as you have enticed them with your summary introduction.