Lak are purple orbs of some sort of energy that you are able to hold in a Chaos Necklace. Chaos necklaces can be purchased from merchants and used to carry Lak. Normal Chaos Necklaces, meaning level 1, carry up to 500 lak. After that, you are no longer able to gain lak.
Here is what Lak looks like, straight off of the Rappelz main site.

Now what can you do with lak? Well, you can take it to a Lak Trader and he'll either trade you lak for Boost Chips or for Rupees. Once you find a lak trader, a dialogue like this will come up:

Now you can either change Lak for boost chips or rupees as I stated earlier. The exchange rate for boost chips changes from rank to rank. For example, if you wanted 100 R2 force chips, it would cost less lak than trading in for 100 R3 force chips.
Meanwhile, you can also exchange Lak for Rupees at a conversion rate of 250 rupees per lak.
Now you may be wondering, "How would I get a necklace that stores more Lak?"
Well, to do so, you can't upgrade it at any old blacksmith. To upgrade a necklace, you'd need 3 things.
1. Necklace
2. Catalyst of Stabilization (Available from any merchant)
3. Augmentation/Composition/Reinforcement of Chaos (Available from Cash Shop or other players.)
What you then do is combine the CoS with the Necklace in order to remove the chaos stone. Once that's finished, you can upgrade it with either Augmentation, Composition, or Reinforcement of Chaos. Augmentation is used to upgrade Lak Necklaces from Level 1 to Level 3, although, this does not mean that if you have a Level 1 Necklace, it'll turn to Level 3. It'll only raise it by one level. Anyway, then after the Chaos stone is upgraded, just combine it with the necklace again and you're finished.
Lak, as stated in the Upgrading/Enchanting section, is also used to charge soul power of weaponry.