The Matrix was a fourth-dimensional space outside the normal universe, where the latter's physical laws did not apply.
Starships generated a bubble universe around themselves to travel through it. Entering and exiting, as well as spending too much time inside the Matrix took a toll on the human brain, however, and crews were known to see things that were not really there. (RCN1, RCN2)
While the navigation computers and Sailing Directions provided guidance for navigating in the Matrix, human astrogators could find better, faster, and often less stressful paths through it based on experience and instinct. Sometimes less stress meant less wear on the vessel; sometimes it made a difference between immediate destruction and survival.3:20
The normal space was called sidereal space. Time within the Matrix did not precisely match time in sidereal space.3:7 When a vessel entered the matrix, it was said to insert, and it extracted to get back to the sidereal universe.