I just changed my pilot bearing (and throwout bearing, cluth plate and pressure plate).
The pilot bearing sits in the shaft that the flywheel is attached to. It spins when your engine spins. Even when in neutral.
The pilot bearing is there because when you press on the clutch, the clutch plate stops spinning. The pressure plate and flywheel are still spinning but the clutch plate stops and so does the input shaft to your tranny (now the bearing is being used) and you can shift the car into gear. When you are not pressing the clutch everything is spinng together and so the bearing is not being used. This is why they always say to not hold your foot on the clutch at stop lights. Put it in neutral instead and release the clutch. If not you'll wear out the bearing prematurely.
If the pilot bearing goes bad, like mine did, the input shaft to your transmission will possibly still spin. Mine did because the bearing broke to pieces because in the end it was dry as a bone in there. i.e. no grease. It seized up the input shaft in the hole and so the input shaft was always spinning. Now I could never put the car in gear! I was stuck downtown and cannot shift into first. I had to shut the engine off at all the lights and fire it up when light went green. Finally got home. Dropped the tranny and changed everything. It now works like a charm.
Hope this explains it a little.
Ciao for now.
1985 GSl-SE (238,000 kms) (800 kms on new clutch)