Sandipan Dey explains what a kd-tree is and how it works:
The prime advantage of a 2d-tree over a BST is that it supports efficient implementation of range search and nearest-neighbor search. Each node corresponds to an axis-aligned rectangle, which encloses all of the points in its subtree. The root corresponds to the entire plane [(−∞, −∞), (+∞, +∞ )]; the left and right children of the root correspond to the two rectangles split by the x-coordinate of the point at the root; and so forth.
Range search: To find all points contained in a given query rectangle, start at the root and recursively search for points in both subtrees using the following pruning rule: if the query rectangle does not intersect the rectangle corresponding to a node, there is no need to explore that node (or its subtrees). That is, search a subtree only if it might contain a point contained in the query rectangle.
Nearest-neighbor search: To find a closest point to a given query point, start at the root and recursively search in both subtrees using the following pruning rule: if the closest point discovered so far is closer than the distance between the query point and the rectangle corresponding to a node, there is no need to explore that node (or its subtrees). That is, search a node only if it might contain a point that is closer than the best one found so far. The effectiveness of the pruning rule depends on quickly finding a nearby point. To do this, organize the recursive method so that when there are two possible subtrees to go down, you choose first the subtree that is on the same side of the splitting line as the query point; the closest point found while exploring the first subtree may enable pruning of the second subtree.
k-nearest neighbors search: This method returns the k points that are closest to the query point (in any order); return all n points in the data structure if n ≤ k. It must do this in an efficient manner, i.e. using the technique from kd-tree nearest neighbor search, not from brute force.
Sandipan implements a fairly classic problem in this space: the behavior of a group of flocking birds.