AJAX is shorthand for "Asychronous Javascript and XML." (Read Adaptive Path's defining paper.) The term itself has a pretty loose definition (for example, some of the most well-known AJAX applications do not use XML). A good way for a layman to think about it is "doing things with DHTML that you would normally need something like Flash to accomplish." Things like Google Maps and Gmail are the granddaddy AJAX applications that got people excited about the concept.
Now you know.
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