Originally Posted by Vladimir

You enter another blog's post's trackback URI on your "write" screen, and once you press "publish", the script notifies the other blog via some specific XML about your post being in reference to theirs. An excerpt of your post, along with your post's URI will appear below the other blog's post, usually as a comment or in the same area.

Great way to get linkbacks, trackback spamming is the new cool thing to do. I got my own custom-written script for it, it does wonders with SEs. But generally, they are used to let the other blogger know that you referenced his/her entry. A linkback on your entry is good habit and appreciated.