Whenever you attack/defend against someone, and you win you gain experience points, or XP's as most refer to them. After so many XP's you gain a new player level, or PL. For each new PL you get an supply unit, or SU.
You can use the SU to either up a building one level, or you can sell it to get some cash. You can use the cash to buy production points, and build some fleet.
Normally what I would do is build 4 destroyers. Send 2 at your neighbor, and keep 2 at your planet. Your neighbor should do the same. You will kill the ones he sends at you, and he kills the 2 you send at him. This gives you both XP's.