It's common to believe that if you're arrested and aren't read your rights, you're off the hook. Well, it's just not true. Best case scenario is that the prosecutor can't use anything you, the suspect, says as evidence. As with many legal rules, there are of course exceptions. Anything can and will be used against you.
What is the Miranda Warning?
The Miranda warning is the statement of rights you are entitled to before an officer is going to interrogate you. Officers are required to let you know of these facts after arresting you, but before questioning you:
You have the right to remain silent. If you do say anything, it can be used against you in a court of law.
You have the right to have a lawyer present during any questioning.
If you cannot afford a lawyer, one will be appointed for you if you so desire.
When is the Miranda Warning required?
The Miranda warning is required when you are in custody (meaning you are deprived of freedom of action in any significant way) and police want to ask questions they can use as evidence against you.
If you are not in custody, the Miranda warning is not required to be stated, BUT anything you say can still be used as evidence. Police officers often avoid arresting people—and make it clear to them that they're free to go—precisely so they don't have to give the Miranda warning. Then they can arrest the suspect after getting the incriminating statement they wanted all along.
What to do when being questioned:
If you haven't been arrested, you do not have to respond to police questions. Even if you've been arrested you (typically) do not have to answer questions. In fact, it's better to keep your lips sealed and have a lawyer present for any questioning. A police officer generally cannot arrest a person simply for failure to respond to questions. Suspects all too frequently unwittingly reveal information that can later be used as evidence of their guilt.
Consequences of Failure to Provide Miranda Warning:
Without a Miranda warning, what the arrestee says in response to questioning can't be used for most purposes as evidence at trial. A violation of Miranda rights doesn't necessarily mean that the officers coerced the statement out of the suspect. But if they did, not only is the statement inadmissible, but so too is any evidence that the police obtain as the result of it.
TALK TO A LAWYER FIRST!
The Miranda rule is complex, and no one article can address all its ins and outs. If you've been arrested or charged with a crime, you should talk to a lawyer for a full explanation BEFORE talking to the police.