It's a Pawn which is used as a bait by one player: if captured, the player who sacrified it should get some dynamic or positional compensation and usually the initiative.
More often than not, the definition is used to describe Opening variations when the given Pawn is a Knight Pawn on the second rank, normally to be captured by the opponent's Queen, as in the Poisoned Pawn variations of the French Winawer and of the Sicilian Najdorf.
See also this wiki page for a still brief but probably better explanation:
http://en.wikipedia.org/wiki/Poisoned_Pawn_Variation
Another explanation, not a very good one really, but quite funny:
http://www.youtube.com/watch?v=rElzhi1BbWk
Could someone please define this term for me? Thanks.