"Phishing" is a term coined by computer hackers who use email to "fish" the Internet hoping to hook people into giving them passwords and/or credit card information. In a typical phishing scam, you'll get an email that appears to be from a reputable company (your bank, PayPal, a government agency, etc.), and you'll be asked to click a link to a website where you can supposedly update your account information.
Can you spot a phishing attempt? Take the SonicWALL Phishing and Spam IQ Quiz to find out how good you are at telling the difference between a scam and a legitimate e-mail.
While you're at it, take a look at How to Enable Phishing Email Protection in Outlook to ensure your copy of Outlook 2003 or Outlook 2007 gives you a first line of defense.
And for a good overview, watch Phishing Scams in Plain English: