Openalias is Monero’s aliasing system. It is meant to make it simpler to send monero to an address, by applying a label (itself using DNS) to an address. Using DNS prevents landgrabing (of course, landgrabing DNS itself is still an issue). openalias is compatible with simplewallet or above and but not with any exchange yet).
For instance, if you want to send moneroj to support the development of Monero, you can either send to the dev fund address


or the much simpler to memorise alias:
Of course, before sending to an alias, the said alias must have been created. To do so, add a record to your domain name (if you don’t have a domain name, get one through your favorite DNS registrar). Simplewallet will decode these so you can type transfer 3 100 and it will go to the project donation fund.
More info here (including information about privacy and security issues).