How does Terrarion work?
What Terrarion basically does, is repaint the color of mana. If you have two blue mana, but need a red and a green one, you can activate Terrarion's ability.

Let's look at that ability: The cost to activate it are on the left side of the :, and he effects on the right. The costs are: pay 2 mana, tap Terrarion and sacrifice it.


The mana may be of any color, or even colorless
Why bother tapping it if we're going to sacrifice it anyway? Terrarion comes into play tapped, and once it's tapped you can't tap it again. So, in the first turn you can't activate this ability.
Sactifice it. This one's obvious. Note that Terrarion has a leaves the battlefield triggered ability, so you get to draw a card.


As for the effect: You can choose to add 2 mana of any color (though not colorless - Terrarion requires us to choose from the Colors of Magic: Red, Green, White, Black or Blue). They can be two different colors, or 2 mana of the same color, as per Gatherer:


  You can get either two mana of the same color or one mana each of different colors.


But didn't we just pay two mana. Yes, we've paid 2 mana of color XY, and gained 2 mana of color WZ. You have effectively repainted 2 mana to better suit your purposes.