Here is a nice summary of what LiDAR is :
LiDAR, which stands for Light Detection And Ranging, is a remote sensing system used to determine the elevation of an object on the ground. LiDAR data are used to produce highly detailed elevation or terrain models. Mounted on an aircraft, the LiDAR system is fully integrated with an airborne global positioning system (GPS) and inertial measurement unit to record hyper-accurate horizontal position and vertical elevation values of precise points on the ground.
- from the press release "GeoEye Announces MJ Harden's Purchase of Optech's Latest LiDAR Aerial Imaging System"
And here is a nice introduction from Optech's website: www.optech.ca/aboutlaser.htm