You can run multiple applications on a Mac, you're only restricted by your system's hardware and memory. The more processing power and memory on your Mac will allow you to run more applications at any given time.
Note however that the Mac OS X Menu Bar will show only one application at any particular point in time despite numerous applications running. Please read the following guide - What is the Menu Bar? for an explanation.
When you switch between applications, the Menu Bar changes accordingly. Note that if you were running the Safari web browser and iPhoto and switched from Safari to iPhoto, Safari will continue to run in the background. It won't pause or become idle. For example, you can download files from the Internet with Safari as you view photos in iPhoto and listen to music in iTunes. All will be active applications but the Menu Bar will only show iPhoto as you were scrolling through your pictures.
When you switch between applications, the Menu Bar changes accordingly. Note that if you were running the Safari web browser and iPhoto and switched from Safari to iPhoto, Safari will continue to run in the background. It won't pause or become idle. For example, you can download files from the Internet with Safari as you view photos in iPhoto and listen to music in iTunes. All will be active applications but the Menu Bar will only show iPhoto as you were scrolling through your pictures.