Blender to Unity Material?

Hello, I made some basic models and added a material I downloaded from the material repository, and when I assign the materials to my model the model turns red in the editing window and doesn’t actually show the material unless I render the image, is this how it’s suppose to be?

Now to the important question, how should I export Blender models to work and look correct in Unity 3D? I’ve Googled around a bit and some have said I need to “UV Unwrap” before I move the model, is this true or false? Also what exactly is UV Unwrapping in a easy to understand definition? When I export the model (as a .dae or .fbx) the model shows up in unity but in the red color like in Blender, how can I fix this? Again I’ve Googled but I can’t seem to get an exact answer, or at least one I understand.

Thanks for all responses in advance.

Also what exactly is UV Unwrapping in a easy to understand definition?