Twitter is a microblogging site where you can post your latest updates, what you are doing etc. etc. You can follow some good people and some others follow you. Its a good way to promote your website/blog too.
I use twitter, and I have to say I have a love/hate relationship with it. I started using it because some of the marketers I follow were singing its praises. I'm not sure I've figured out the best way to use it for my own marketing, but it seems like everything else, you have to build up relationships with your "followers" and join the conversations going on. Anyone checking it out should be warned that it can be addictive and can cause you to waste unbelievable amounts of time.