Multiple Myeloma is a cancer of subset of cells that are part of your immune system. They are called plasma cells and they are a special type of cell which form antibodies. One specific plasma cell will start dividing out of control and it'll produce mass quantities of antibody that your body doesn't need. The problem with this is manyfold:
First of all, the antibodies clog up the kidneys and can cause kidney failure
Because so much crappy antibody is made, normal antibody can't be made so the person becomes susceptible to certain infections
Certain types of enzymes found in bone are activated and they eat the bone away--that's why MM patients have brittle bones.
There are all sorts of other effects of MM, but those are the main ones.
I'm not sure if it's hereditary or not.