What Are Keloids?
The short answer: Keloids can range in all sizes from small to large, are generally not painful, and contain no substance inside except scar tissue (they do not seep, pus or bleed).
More information: Keloids are formations of scar tissue that grow because the body over-defends itself as a result of trauma or surgical incisions. In most cases, keloids have to be removed with the help of medical treatment or surgery - you can't just wash them away. People with African-American descent tend to be more prone to keloids, although people of all ethnicities can be susceptible. Keloids also tend to be genetic.
If you are prone to keloiding, piercings are strongly urged against. Tattoos can also lead to keloiding, although piercings and surgical modifications seem to be the most likely culprits. There's no real limit as to where keloids can form, as they can also grow on the tongue and other mucus membranes. The only way to truly prevent keloiding is to not get the tattoo or piercing in the first place. If you decide to chance it, just be aware that you may end up with excessive scarring and/or keloids.
The short answer: If it hurts, seeps, oozes pus and/or bleeds, it's not a keloid; it's probably either an infection or a sebaceous cyst (which can become infected).
More information: Infection growths near a piercing occur much more often than keloids and they can happen to a new piercing or even one that is well-established. Irritants like oil, sweat, dirt, perfume, hairspray and lots of other things can aggravate a piercing and cause an infection. It will create a growth filled with blood, pus, and or sebum. It's quite painful to touch and generally doesn't respond very well to normal cleansing. The good news is that it's easy to treat as long as it hasn't become chronic.
Treating an Infection
The short answer: Cleanse 2-3 times a day and apply 1-2 sea salt soaks per day as instructed here. If it doesn't clear up in a few days, see your doctor.
More information: Cleansing with a really mild antimicrobial soap like Provon or Satin Therapeutic Cleanser will increase your chances of healing the infection without causing further irritation. Sea salt soaks are also important because it actually draws out the pus and blood inhabiting the growth, which will release the pressure and aid healing. Sea salt soaks do not hurt - in fact, they are usually quite soothing.
The short answer: See your doctor for diagnosis and treatment.
More information: Sebaceous cysts, while not malignant, will usually be little more than an annoyance and will sometimes go away on their own. They are normally painless unless they rupture or become infected. They are easy for your doctor to diagnose, but usually have to be removed surgically to remove the entire sebaceous gland to prevent recurrence. Do not squeeze or try to puncture a sebaceous cyst - the best thing for you to do is see your doctor and follow their recommendation.