TrackBack is a system for connecting weblog posts across sites. If you've been reading weblogs for a while, you've probably seen how conversations can happen across several weblogs. TrackBack simply makes the connections more visible.(from BlogRoots BlogPopuli How-To)
TrackBack was developed by Movable Type, and integrated into their weblog tool. It's rapidly becoming an open standard for connecting posts.
I've been trying to get my head around TrackBack since it was first announced, and only now that I've installed the standalone TrackBack tool on randomWalks have I begun to get what's going on.