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Pirke Avot, 1:1
Moses received the Torah from Sinai, and transmitted it to Joshua, and Joshua to the Elders, and the Elders to the prophets, and the prophets transmitted it to the men of the Great Assembly. They used to say three things: "Be deliberate in judgement, and bring up many students, and make a fence for the Torah."
The Mishna is divided into Orders, then sections, then chapters, and then mishna'ot (confusingly, the singular is mishna). so this is the first mishna of the first chapter of Avot, which is in the order Nezikin in the Mishna.
This chapter describes the passage of the Jewish Law and tradition from Mount Sinai down to the era of the Destruction of the Temple - accepting the Bible's chronology, some 1400 years. It's also going to throw in some wisdom on the way, in the form of aphorisms said by the people in the chain. The first mishna describes the transmission process from the beginning:
Moses received the Torah from Sinai...
This simple idea establishes the basic claims of orthodox Rabbinic Judaism, that the Torah was given to Moses on Mount Sinai. But the passage isn't referring just to the literal book, but also to the Oral Law
The idea is that the Torah taken at face value is simply insufficient to put together a legal system. There are too many ambiguities, or silences on important issues. The Oral Law is, basically, all that stuff that wasn't written down explicitly in the Torah; the specifics: how many, how big, what shape? This tradition (sometimes called Pharisaic or Rabbinic) is what becomes the Mishna itself. Other groups, like the Sadducees, denied the validity of the Oral Law. So this mishna (and those that follow) are kind of a self-provenance. It is proclaiming "The Oral Law is of divine origin, just as the written Torah is".
Why does the verse not say "God transmitted the Torah to Moses"? That would have been a more dramatic and direct expression. The word 'received' implies imperfect communication. Perhaps Moses, limited as a human, was incapable of comprehending the full degree of Revelation at Sinai.
...and transmitted it to Joshua, ... to the Elders, ... to the prophets...
Joshua, is Moses' successor and primary student. After he dies, the Torah is carried by the Elders of the twelve Tribes of Israel in the pre-Davidic days. In the times of the Kings, the tradition becomes the province of the Prophets, who carried it with them to Babylon.
...the prophets transmitted it to the men of the Great Assembly.
The Great Assembly is the Jewish leadership after the Babylonian Exile, which rebuilt the country and the Temple. According to tradition, the prophets Haggai, Zechariah and Malachi were members of the original Great Assembly.
Note that the word "transmitted" appears at two points above; once to describe the transfer from Moses to Joshua, and again here. One explanation is that the text seeks to emphasise the most risky transfers. could Joshua understand things as well as Moses, who spoke directly with God? How could the Great Assembly have the same level of comprehension as those with the gift of prophecy? The word "transmitted" reassures us that they were up to the task and the transmission was perfect.
The Assembly functioned as a court, and the advice it gives may well be directed at judges and communal leaders specifically:
They used to say three things: Be deliberate in judgement...
Why do we need to be told that they say three things? For those readers with a Kaballistic bent, The Maharal says that it's to point out that the advice corresponds to the sephirot of Chochma, Binah and Da'ath. For the rest of us, it's supposed to show the inclusivity of the advice.
The first point is jurisprudential; that judges should always deliberate on the cases brought before them, even if there is apparently overwhelming evidence in favour of one conclusion. I'd read this as a condemnation of the idea of summary judgement. One source says that even if the same parties come before the same judge with the same complaint, he should still go through the case again.
...and bring up many students...
This is directed towards those with knowledge, the scribes and judges that would later be called Rabbis: Go out, teach! The message is that the Torah shouldn't be jealously guarded and taught only to a few adepts, but should be spread as widely as possible. It also teaches that it's a responsibility of the educated to educate.
...and make a fence for the Torah.
Jewish Law is full of gedarim, fences for the Torah. The idea is simple; 'fence off 'the commandments with boundaries. For example, on Shabbat, traditional Jews won't use electricity. The Rabbis introcduced a fence, called Muktzah, essentially banning even touching electrical objects on Shabbat, just in case. A large part of Halacha is fences around the Torah. These serve to prevent a person doing something they shouldn't (like actual fences).
The Torah has seventy faces. The above commentary represents my thoughts and those of commentators through the ages. However, these verses are supposed to be ambiguous, and any number of interpretations are valid, including yours. If you have anything interesting to add, let me know and I'll credit you in the writeup.
http://www.spiral.co.za/ethics/e-menass.htm
http://www.torah.org/learning/maharal/p1m1part2.html
http://www.aish.com/spirituality/growth/Unlocking_Ancient_Wisdom_-_Pirkei_Avot_11.asp