Darwin begins On the Origin of Species with a familiar example, that of domesticated plants and animals, to illustrate the concept of variety. Darwin asserts that variety is product of sexual reproduction, which is correct, and also mentions experiments that suggest that development during the embryonic stages can impact the individual later on (these experiments specifically concentrated on deformities resulting from embryonic trauma). Arguably, this is an early example of nature vs. nurture; Darwin's focus rests on the nature side of this argument. (1)
With domesticated organisms, humans guide the selection process. However, Darwin also points out the sterility of many domesticated plants and animals, as well as their "weak and sickly" nature. He notes that animals taken from the wild have difficulties breeding in captivity, but that animals that have been domesticated breed under quite "unnatural" conditions, such as rabbits in a hutch. (1)
Worldwide domestication of plants and animals began approximately 10,000 to 7,000 years ago, kicking off the first agricultural revolution (2). This allowed for the creation of permanent settlements and stratified societies as well as a population boom (2). Animals that were have been domesticated over thousands of years are dependent on humans for survival, just as humans are equally dependent of them for food (2). The fact that they have been adapted for domestication means that they will thrive and reproduce under human constraints, whereas animals adapted to the wild have difficulties living and breeding in captivity.
Darwin suggests that traits correspond to use, such as bigger udders in species of cows subject to heavy milking, light wing bones in domesticated fowl that do not need to or are prevented from flying, and drooping ears in livestock that fear no natural predators. (1)
Darwin breaks varieties of similar animals into races. That is to say that there are several races of cows rather than species (1). This terminology leaves a lot to be desired, I prefer to call distinct variants of the same species breeds. To quote Darwin, "I do not believe, as we shall presently see, that all our dogs have descended from any one wild species; but, in the case of some other domestic races, there is presumptive, or even strong, evidence in favor of this view." (pg. 105).
Well, Darwin was wrong about different dogs being from different origins. Dogs have been traced back to the domestication of wolves in the middle east approximately 15,000 years ago. All the variation seen in modern dog breeds is a result of human selection for certain traits (3). However, Darwin was right to think that different domestic breeds were from a common ancestor.
Darwin also cites examples of animals that always have traits that go together as an example of the "mystery" of variation. Darwin had no working knowledge of genes as we do today. However, he was able to recognize some of the basic ideas of inheritance and considered it the rule rather than the exception.
Darwin goes on to talk about pigeons for at least a few pages. Darwin seemed to be quite the pigeon enthusiast and breeder. One thing he did stumble upon was the basic laws of Mendelian inheritance and the reappearance of recessive traits in the F2 generation (that is to say, for those unfamiliar with genetic inheritance patterns, that a recessive trait bred against a dominant trait will not appear in the offspring of that cross, the F1 generation, instead it will appear in the offspring of the F1 generation). Darwin did not do as extensive experiments as Mendel, and historical opinion holds that he was not familiar with Mendel at all. Darwin considered the reappearance of recessive traits to be the individual reverting towards its ancestral form (1). I don't know that this is exactly the clearest explanation; for a while, the importance of gene inheritance and long term evolution was not the focus of science.
If you are reading along with me in Origin, be prepared for just pages upon pages of pigeons. This might be why the book is so unread. Darwin should have written a follow up volume called On the Origin of Pigeons. It might have been longer.
Once the pigeon saga is wrapped up, Darwin dives into the concept of artificial selection (when humans guide the breeding process of plants and animals to produce specific traits). Artificial selection is historically recorded and is the process through which wild plants and animals are domesticated (1).
Darwin eases his audience into accepting natural selection by giving first the familiar example of artificial selection. If man can do it, why not nature?
 Darwin, C. On the Origin of Species 2nd ed. edited by J. Carrol. 2003.
 Gupta, A. K "Origin of agriculture and domestication of plants and animals linked to early Holocene climate amelioration." Current Science, Vol 87: July 2004. http://www.ias.ac.in/currsci/jul102004/54.pdf
 Wade, N. "New findings puts origins of dogs in the middle east." New York Times. March 2010. http://www.nytimes.com/2010/03/18/science/18dogs.html