The capacity of the two-user Gaussian interference channel has been open for thirty years. The understanding on this problem has been limited. The best known achievable region is due to Han-Kobayashi but its characterization is very complicated. It is also not known how tight the existing outer bounds are. In this work, we show that the existing outer bounds can in fact be arbitrarily loose in some parameter ranges, and by deriving new outer bounds, we show that a simplified Han-Kobayashi type scheme can achieve to within a single bit the capacity for all values of the channel parameters. We also show that the scheme is asymptotically optimal at certain high SNR regimes. Using our results, we provide a natural generalization of the point-to-point classical notion of degrees of freedom to interference-limited scenarios.