Listen to it here.
Robert Johnson is one of the most influential eary Delta Bluesmen. The legends of him selling his soul to the devil at "the crossroads" have appeared over and over again in fiction, everywhere from the movie Crossroads (aka the "Ralph Maccio movie") to the TV Series Supernatual.
The legend itself is probably a conflation of several disparate facts:
1) A Delta Bluesman named Tommy Johnson (no relation) used to tell his audiences that he sold his soul to the Devil at a crossroads to learn how to play (btw, Tommy Johnson occurs as a character in "O Brother Where Art Thou") .
2) Son House, most likely just joking, said repeatedly that when he first knew Robert Johnson, he couldn't play a lick of guitar. Then Johnson went away for a few months, and when he came back he was incredible. And Son House told Johnson he must've sold his soul to the devil to play so well.
3) Three of Robert Johnson's extant songs are "Crossroad Blues," "Me and the Devil Blues" and, "Hellhound on my Trail."
Even though there is no evidence that Robert Johnson himself ever did anything to spread this story, it has stuck like glue to him, probably because he plays so well. How well does he play? Eric Clapton lists him as one of his favorite guitarists and strongest influences.
The song "Sweet Home Chicago" is itself controversial because the lyrics consistently mention "The land of California/My sweet home Chicago". Personally, I believe the story that he had a cousin living in Port Chicago, California -- and that Johnson was specifically talking about going there.
As for why you should be familiar with this particular song, I give you several reasons: In it, Robert Johnson's falsetto actually WORKS. In his other songs, I don't like it so much. With a set of altered lyrics (eliminating mention of "California"), it has become the defacto anthem of Chicago. And as LaVere once said, "It's like 'When the Saints Come Marching In" for the blues crowd."