Retool is a tool that facilitates rapid prototyping by providing a graphical interface to quickly build and test applications, such as a prototype app for tracking vehicle fuel economy using SQL Server as a data store. The process involves setting up a database with tables for vehicles and fill-ups, configuring Retool to connect to the database, and implementing a front-end GUI that allows users to perform CRUD operations. The app enables multiple users to manage vehicles, add fuel expenses, and view data through charts. The tutorial covers creating and managing vehicle and fill-up records, integrating user authentication, and building interactive components like lists, modals, and charts. Retool's capabilities extend beyond basic database management, allowing for integration with other APIs, customization with code, and sharing across organizations, making it a versatile tool for developing various types of applications.