What is Case Law? How do Court Decisions become Law?

Simply put, the Courts fill in the blanks.  Legislature passes a law and then as cases are decided and appealed the blanks are filled in.  Easy example:  Ohio legislature passes a law stating you can't drive a vehicle under the influence.  Sounds simple enough right?  Not so simple.  What exactly is a vehicle?  A car?  Of course...what about a Segway?  Hmm.  That's where the court's come into play.  Let's say Jimmy is arrested for a DUI on his Segway and a Jury finds him guilty.  Well, Jimmy can appeal that conviction to the court of appeals.   The court of appeals will then decide if a Segway is a vehicle.  If they decide that it isn't, then going forward you can't be charged with a DUI on your Segway.  The decision is only binding on the area which the that court of appeals controls.  This is a simplified explanation so do some reading if you want to know more.