Este, Esse, Aquele & Isto, Isso, Aquilo

Portuguese has three demonstratives, one for each of three places:

• este, esta, estes, estas: near the speaker (aqui), as in este casaco aqui (this coat here)
• esse, essa, esses, essas: near the listener (aí), as in esse livro aí (that book next to you)
• aquele, aquela, aqueles, aquelas: far from both (ali, lá), as in aquela casa lá ao fundo (that house over there)

These forms agree with their noun in gender and number: esta cadeira, aqueles rapazes.
For a thing you don't name, such as something unknown or a whole situation, use the forms that never change: isto (here), isso (near you) and aquilo (over there), as in O que é isto? (What is this?). Never put isto, isso or aquilo in front of a noun.