Geotagging, (sometimes referred to as Geocoding), is the process of adding geographical identification metadata to various media such as websites, RSS feeds, or images. This data usually consists of latitude and longitude coordinates, though it can also include altitude and place names.
Geotagging was once a feature reserved to the most extreme Flickr and online photo community addicts, but it turns out it's proving helpful to even the average geek. If images are geotagged you can easily find images taken near a given location by entering a latitude and longitude into a Geotagging-enabled image search engine. This makes finding news, websites, or even restaurants and tourist attractions much easier.
For an additional example check out how geotagging can help you plan your vacation.