Blending wine can be as simple as taking two separate wines (i.e. Cabernet Sauvignon and Merlot) and mixing them together - right through to complicating things and taking multiple varietals from multiple vineyards and even multiple regions and blending them to make a new wine with a unique personality and flavour experience. It takes a lot of experience and a very refined palate to successfully blend wines for today's wine markets.
A winemaker may blend wines for a variety of reasons: to adjust pH, acidity, residual sugar, alcohol levels, tannin content or to improve colour, aroma or flavour. As well as understanding all of the differences that exist from more than one vineyard, differences that develop from one fermentation tank to the next, different tannin levels between barrels, etc.

 

Wines, like Châteauneuf de Pape and Champagne, can be made from a blend of red and white grapes. Also Rosé Champagne is often given its' pink colour, from the addition of red wine (i.e. Pinot Noir wine) before secondary fermentation.
Other wines, like Bordeaux are blends of the same grape colour. In the case of Bordeaux, the grape varietals; Cabernet Sauvignon, Merlot, Cabernet-Franc and Petit Verdot are blended, in order to add the character of each grape to the final wine.
Even wines of a single grape varietal are (can be) blended, from different harvested parcels and or vineyards - plus from different tanks and barrels. In this case, wines that have been vinified separately (referred to as lots, batches, parcels etc...) are blended together. This blending may come about in order to create a specific style of wine unique to that vintage. At the highest quality level, individual vineyards are vinified separately, each adding their own unique character to the final blend.
Blending to make a Non-Vintage Champagne, the head winemaker (Chef de cave) will taste all of the different parcels of Chardonnay, Pinot Noir and Pinot Meunier from the current vintage and their reserve wines. In order to figure out what to blend together to make / keep the house style (their unique Champagne style crafted year after year) consistent.
When blending a wine - you are trying to achieve a result where the final finished blend in the bottle, should be greater than the individual parts.