The Token module for Drupal 4.7 and 5 exposes simple text substitution tokens like [title] and [user-name], for use in path generation, mass mailings, and many other situation where admins want to set up text replacement patterns without using PHP snippets. Other modules can expose their own domain-specific replacement tokens (like information about a purchase, or an organic group that a user is a member of) and use Token's centralized replace() function to replace token occurrences in any piece of text.
If you are curious how you might use tokens or who is using it, consider this list of modules that use token
If you want to help get Token into Core then there's the issue. Please don't just subscribe to the issue or you will lose karma points in the eyes of some of Drupal's most respected community members.