In very simplified terms, think of a torque converter working this way.....take two window fans and place one in front of the other. When you turn fan "A" on low, the air will blow across fan "B" thus making fan "B" spin. Now imagine fan "B" has a load on it. Fan "B" will spin but it will never spin at the same RPM as fan "A". The difference in speed is known as "slip".
Now put fan "A" on medium...fan "A" spins faster and so does fan "B". Fan "B" although spinning faster will still never spin as fast as fan "A" BUT (and that's a big BUT) the percentage of slip is less.
Now put fan "A" on fast...fan "A" spins even faster and so does fan "B". Fan "B" although spinning faster will still never spin as fast as fan "A" BUT again the percentage of slip is even less than on medium.
The faster you spin fan "A", the faster fan "B" will spin and the less slip there will be, HOWEVER, fan "B" will never, ever spin at the same speed as fan "A". There will always be slip (the drive medium is, after all, nothing but air).
Now enclose both fans in a sealed box. Replace the air with transmission fluid. Replace the box with a leak-proof metal can. Call fan "A" an impeller. Call fan "B" a turbine. The impeller is connected to the engine. The turbine is connected to the gears in the transmission (and onto the driveshaft, differential, axles, and finally the wheels). Congradulations!! You have just made a torque converter. (Actually you made a "fluid coupling"....torque converters were developed several years later in the history of the automatic transmissions but now we're getting rather complicated and that's a subject for another day.)
A torque converter clutch is a friction disc located within a torque converter that will mechanically lock the impeller and the turbine. As mentioned above, there will always be slip in a torque converter (fan "A" and fan "B" never spinning at the same speed.) When the torque converter clutch is locked up, there is a mechanical connection between the two and there is no longer any slip.
Slip in a torque converter "beats" the transmission fluid and creates a lot of heat. On a transmission without a TCC (like a C6) I would estimate that 80% of the heat in the transmission comes from converter slippage. The other 20% from the gears, pump, etc. This is why, for example, an E4OD generates much less heat than a C6.
Eliminating slip also improves MPG. On a transmission without a TCC, the engine must spin a little faster in order to compensate for converter slip. (This is why years ago, if you took to identical cars, one with manual transmission and one with automatic, the manual transmssion'd car got better mileage....because the clutch in the manual tansmission'd car did not have any slippage and the torque converter did. Modern automatics with a TCC have pretty much eliminated the MPG difference.)
OK...now onto stall speed.....going back to fan "A" and fan "B"......there will be a point at which fan "A" is spinning so slow, it will not be blowing enough air to make fan "B" spin. Some where between fan "A" spinning too slow to drive fan "B" and fan "A" spinniing at its maximum but fan "B" still not spinning (because of load) is the stall speed. There are 100's of factors that affect stall speed.....engine speed, engine torque, pitch of the vanes in the torque converter, gearing, weight, etc, etc.
For example, maybe fan "A" needs to spin 500 RPM before fan "B" will start to spin. But if you increase the pitch of the blades on fan "A", fan "B" may start spinning when fan "A" is at only 400 RPM. That second combination has a lower stall speed. (Google "TH400 switch pitch" for an example of this.)
There....it's all as clear mud!!