what about Section 121 is so special?

[Daniel Thomas]

I'm trying to understand what the big deal is?  As I understand it, you save capital gains on $250k for single, $500k for married when you sell the house you lived in so long as you lived in 2 of the previous 5 years.  Ok, tax savings, yay.....and?  My question is:  doesnt that mean that everyone who sells a house they live in is doing this?  I've read about this idea like it was some sweet deal (tax savings is great yes) but I am missing what is so special (how others make it seem) or does every home owner who ends up selling use this and it isnt special but actually typical?  Are there more stipulations?  Can I build a house, live in it for two years and sell it using section 121 to save taxes?  Does the house have to be already built?  Can I buy a house that needs some rehab, upgrade it while living there and save on the taxes of the higher value?  

I apologize for posting this if it has been covered but I find the search function on this site incredibly lacking.  I searched on 'section 121' and got 10 pages of section 8 posts.  I read the article that mentions 121 some but it didnt really address my above questions.  Thanks for reading and replying.