File handling involves text files and binary files. Text files use delimiters like EOL to separate lines while binary files store data in memory format without delimiters. Common stream classes for file input/output are ifstream for input, ofstream for output, and fstream for both. Files are opened using stream objects and functions like open(), get(), put(), read(), write() are used for input/output along with close() to finish. Stream pointers track reading/writing positions and can be manipulated with functions like seekg() and seekp().