How can you calculate with them and what can you actually make up from the calculations? And what is exactly meant by normed division-algebras?
As to your second question, a normed division algebra is $A$ is an algebra over a field which has a sub-multiplicative norm: $$\forall x,y\in A\qquad \|xy\|\le\|x\|\|y\|$$
The interesting thing about octonions is that they form the highest dimensional normed division algebra over the reals (up to an isomorphism): see Hurwitz's theorem.
References: "Normed Algebra". Encyclopaedia of Mathematics. Retrieved 6 June 2013.
Edit: For your first question, I suggest you check out What are some real-world uses of Octonions?.