Every knitter makes mistakes: dropped stitches, miscrossed cables, etc. There are two ways of dealing with an error; first, you can regard the mistake as a stylistic quirk and enjoy its existence, or second, you can fix it.
Two important words to note here are Tink and Frog. Tink is "knit" spelled backwards, and so it is the process of unknitting, stitch by stitch. Frog refers to the "frog pond," where the most common sound is "rip it." This involves removing the work from the needles, and pulling the free end of the yarn until the undesired section has been eliminated. The yarn left over may be kinky or uneven, like any recycled yarn, so it might be nice to steam out the kinks (but it is not absolutely necessary). (For an excellent article on unknitting with pictures!, see here.)
Both tinking and frogging are effective methods of fixing mistakes; tinking is more common to correct minor errors that you just noticed (purling instead of knitting 3 stitches back), and frogging is generally used to fix major errors fairly far back (decreasing every second row instead of every third row, for the last 18 rows...).
For other errors, however, such as a miscrossed cable, or a knit stitch instead of a purl stitch 4 rows down, there's the handy-dandy drop-stitch method. For this, you generally need a crochet hook (especially beginners), and courage. When you have reached the column of stitches that contains the error, you drop the stitch until the error stitch has been undone. Then, you take the crochet hook, and work your way up. (For a more in-depth explanation of the picking-up, try this.)