Written Japanese uses a group of about 2,000 characters (kanji) from Chinese as well as characters from a phonetic alphabet to form words and sentences. With only 2,000 or so characters to choose from, there can be many homonyms, so an isolated spoken word can be easily misunderstood without context or being able to see the written form. School students learn kanji basically by rote learning, writing and re-writing the characters, especially in the earlier education years. It is difficult to read a newspaper without at least a grade school education, which probably teaches over 1,000 kanji. The literacy rate in Japan is something like 99% I think I've heard.
Chinese people generally learn Japanese very quickly because they can recognize and read the characters, even if they don't always have the same sound associated with them as in Chinese. For westerners living in Japan, learning Japanese can be very difficult, because even though the environment is rich in language (written signs, magazines, etc.), they cannot sound it out like a phonetic alphabet to figure out meaning.
There have been (meager) movements in Japan to move to a purely phonetic alphabet. However, with such a high rate of literacy there is no need. Also, by stripping away the kanji, we would lose so much depth from the language. It's very interesting to see how words and concepts are formed by viewing the meaning of the kanji as well as the components of the kanji used.
I've probably written much more than anyone cares about! Not sure where that brain dump came from.
