Harmonicas come in 12 different keys- one for each 1/2 step in a standard chromatic octave. If you play the harmonica in the key that it is labeled, you are playing straight harp or first position. You would be using mostly blow notes. This is the position that most of the "folk" type music is played , as well as being best suited for playing melody lines.

To play cross harp (second position) you are playing the harmonica in a key other than the key in which the harmonica is labeled, the key is five 1/2 steps down from the key of the harmonica. To play a C harp in cross, or second position, you will be playing in the key of G (count down from C - B, Bb, A, Ab, G) To do this you will be playing mostly draw notes. The draw 2 is a G, and the draw notes on 1,2,3 and 4 make up a G chord! (Simple , huh?)

The main reason for doing this is that the draw notes can be bent for more expression and to get your "blue" notes (flatted third, fifth, and seventh) which are not naturally present on the harmonica for the key in which it is labeled. This is the position that is mostly used for blues, rock, and country. In these styles the harmonica is usually not playing the melody, but is used to add fills and riffs that compliment and add to the music. So using this example, and depending on the style of music being played, if the song is in the key of G, you could play a G harp in first position, or a C harp in second position and both would "sound right" with the music. Of course the C harp could be made to sound more "bluesy" than the G, and would work better on blues, etc.

If you haven't figured it out yet, there are 12 "positions" that a harmonica can be played in, so it is "possible" to play in all keys on one harmonica, but it is difficult. Most people only learn first, second, and maybe third positions.  See the article below this one below for a good explanation of all 12 positions

Song Key	Cross Harp	Third Position
Ab	Db	F#
A	D	G
Bb	Eb	Ab
B	E	A
C	F	Bb
Db	F#	B
D	G	C
Eb	Ab	Db
E	A	D
F	Bb	Eb
F#	B	E
G	C	F