In a nutshell, nanotechnology could produce machines on the scale of the components of your cells. So amazingly small that they will be able to shape matter the way a computer programmer shapes bits. The possibilities for this kind of technology are nearly boundless as Drexler will quickly point out to you in his book.
I read his book many years ago and was immediately fascinated. I quickly jumped into as much detail as I could find and was somewhat disappointed. All the signs point to this technology on the near horizon. But it is not here yet, and it was far from being here when I read Drexler's book.
Unfortunately, I feel a little uncomfortable with the organization that Drexler and others have started. While the technology proposed seems both plausible and exciting, some of the tactics their organization is using make me uncomfortable and for some strange reason remind me of Scientology. While Scientology claims many of the things that Nanotechnology promises, Nanotechnology seems to be fostered from a truly scientific direction and is much more plausible. But their organization seem to have similar structure, politically speaking.
Nevertheless, the possibilites and the one simple fact that it has been done before show that there is much merit in this pursuit. I highly recommend exploring a bit of it in the links below and coming to your own opinion - or better yet, offering advice on building a constructor.
An excellent introduction and hot list
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Rudy Moore