What a great question! When you get cut, a whole chain of events is set in motion, even though you are not conscious of these events and cannot control them. Our bodies are actually very good at healing themselves, provided the injuries aren't too serious. If the skin could not heal we would most likely bleed to death, even from very small cuts. Also, our skin is a very good barrier against viruses and bacteria. If our skin was not able to heal, it would be much easier for viruses and bacteria to enter our blood stream and cause disease or infection.

When your skin is cut, the damaged cells release several chemicals. These chemicals make the blood vessels in the nearby area become large and very leaky, so that blood flow to the area increases and fluids from the blood are released into the damaged tissues. This is why cuts often become red and swollen. This is important, since our blood contains fluids that can help form blood clots. This is the first step in the healing process. Blood clots not only help keep blood inside the body but they help keep bacteria and dirt out. Our blood also contains special white blood cells that swallow any foreign particles that might have already gotten in, and slowly digest them. These cells are like little stomachs that roam around the injured area, looking for any cell or object that they don't recognize as a living part of the body. In this way, damaged cells are also cleaned up and removed. These white blood cells are delivered by the leaky blood vessels and are attracted to the injured area by chemicals released from the cells that were damaged in the cut, arriving within an hour. After these cells do
their job they die and become reabsorbed by the body.

If the cut becomes severely infected, the infected cells will call for reinforcements: extra white blood cells. These white blood cells are made and released from the bone marrow. Within a few days, the blood becomes packed with them. The white blood cells release signals into the blood that tell the body to increase its temperature (causing a fever). The fever is one way our body tries to kill the invading bacteria, by making its living environment more hostile. Fever can also speed up tissue repair and make the white blood cells more effective at killing the bacteria.

The second phase of the healing process involves regeneration: joining the skin back together and repairing the tissues that were damaged, including blood vessels. The body begins to make the building blocks for new tissue and skin. Damaged skin tissue is replaced with what is called fibrous tissue. This new tissue provides flexibility and strength, and will become first a scab and then a scar. The whole process is monitored by the body though complex chemical signals that are sent and received by the healing cells.

Wound healing is a very fascinating process. It is thought that when a cell is damaged, it releases a number of "factors" that result in a number of things (that is, the damaged cells "tell" other cells that they have been damaged and need repair). One of these factors is a factor that causes endothelial cells (the cells that line the blood vessels) to move toward the site of the wound so that new capillaries can form. This "angiogenic factor" acts as a CHEMOTACTIC factor for the endothelial cells (chemotaxis is another subject that you may be interested in -- there are many examples in biology).
New skin cells (called keratinocytes) also are stimulated to move to the site of the wound, too (they are attracted by yet another factor, different from the angiogenic factor). As you probably know, human skin has several layers and in one (innermost or "basal") layer, there are a number of undifferentiated ("stem") cells that continually replenish lost cells.
In conjunction with repair, the immune system plays a role in keeping the wound form being infected-- many immune cells, especially macrophages, also are attracted to the site of the injury where they scavenge debris and any invading bacteria.

Given that damaged cells release factors that attract and stimulate the "repair" cells, can you think of a reasonable answer to the second part of your question?

Well, the first thing that happens is that a clot forms to stop the bleeding. This happens because the cells that are damaged by the cut make chemicals that make the platelets in your blood stick together to form a clot. That's just a quick fix, though. The platelets also make chemical messages that call other cells to the site and make the nearby cells divide and replace the dead cells. They also make the cells make more of the stringy proteins or "connective tissue" that makes up part of our skin. These fibers are what cause scars. They are not as elastic as normal skin. The chemicals from platelets cause new blood vessels (what are blood vessels and why do we need them?) to grow into the area. Another important thing they do is to attract the cells of the immune system (what does this do?)

Drugs like aspirin stop the platelets from clotting, so they increase the amount of bleeding from a wound.

So how does the healing process stop? Well one thing that happens is that the damaged cells are swept away by the blood eventually and no new platelets are attracted and activated so they are no longer producing those chemicals. The old plug is now a scab that will fall off when the cells and fibers underneath have filled in the wound. Your body will replace some of the scar tissue with new skin cells, but if a wound is too big, or is disturbed while healing, there will always be scar tissue.

Why do we need skin? What does it do for us?