Cold fusion is the nuclear fusion of deuterium, a heavy isotope of hydrogen, at or relatively near room temperature. It is a reaction that occurs under certain conditions in supersaturated metal hydrides (metals with large amounts of hydrogen or heavy hydrogen dissolved in them). The process produces excess heat, helium, and a very low level of neutrons.
Cold fusion is, as far as I know, not universally accepted as possible in the scientific community. If they could get it to work, it would be great though. A cheap and clean source of energy can never be a bad thing after all.