Skeletron

Skeletron is the boss that guards a world's dungeon. To summon this boss, you must talk to the Old Man at the entrance to the dungeon at night. The man will transform into the Skeletron. If you attempt this at day, he will simply say "Come back at night if you wish to enter" or "I cannot let you enter until you free me of my curse".

If one tries to enter a dungeon during the day before killing Skeletron, after a short moment the head of the boss will come spinning and growling into the screen, impacting with the player and causing 9999 damage, one-hit killing the intruder. If you attempt to enter the dungeon at night without defeating Skeletron, he will spawn heads that do 35 damage like the boss. If you manage to defeat one (or more) of the Skeletron heads, it will count as defeating the boss, unlocking the dungeon normally.

Skeletron is a floating, massive skeleton head, with floating arms. What appears to be blood spurting from his arms and neck are most likely "the magic forces holding it together", as noted by Blue in a Let's Play video.

Skeletron will try to swing his arms at you and ram you. His head has 6000 health points and his hands have 2000, so it is not a good idea for newer players to attempt to defeat this monster. He must also be defeated before the break of dawn; all players will instantly die if he is still alive at that point.

Once you defeat Skeletron, you may enter the dungeon as many times as you like, with no bother from Skeletron anymore. Once you defeat him, you may not battle him again on that map, and must create a new one to fight him.

The old man who stands infront of the dungeon can be killed if you manage to deplete his health, however, if you enter the dungeon skeletron will instantly spawn and kill you

Soloing Skeletron
The best way to defeat Skeletron on your own is by gaining at least Shadow Armor and a good weapon such as Ball 'O Hurt, as it can hit multiple times and has good range. Using Projectile weapons such as the Flintlock Pistol is also useful against the boss, as it is fast and powerful due to its damage per second. If you've found a Starfury and have a fair amount of Mana and potions, you could use this very effectively against Skeletron, since it can hit all parts multiple times. Meteor Armor or Cobalt Armor could be helpful due to the Mana reduction. When you start the fight, your best bet is to get on the roof (which you would have previously flattened), where you have high ground and a lot of space to move so that no zombies or spawning eyes can attack you. Once on top, you'll want to target his hands first while aiming for the head; hit it as much as possible while taking out the hands as this renders him useless. Remember to heal frequently when fighting him, as he has many annoying attacks which are hard to dodge, such as his head spin attack. Once the arms are gone, the fight is really easy as he is like a tougher version of the Eye of Cthulhu; all he can still do is fly around and spin his head at you. Killing the hands before killing the head is only recommended if you have a weapon that has a high damage output, since you are limited by the amount of time you have.

Solo video guide - http://www.youtube.com/watch?v=YQVu0Z0h93s&feature=related