There is no non-nerdy way to talk about this, so non-developers feel free to sit this one out.
Pow is a Ruby/Rack application server written in Node.js, with CoffeeScript, by Sam Stephenson. Through a series of small hacks, Pow lets you seamlessly run Ruby web applications on your own machine by creating a symlink to the app's directory at ~/.pow/yourappname, then visiting http://yourappname.dev in your browser. There is no step 3, and you don't have to edit your hosts file or restart anything.
There are some trade-offs. Pow completely takes over your Mac's port 80, which cuts off OS X's very convenient ability to serve up any HTML/PHP content saved to your ~/Sites folder. But Pow can serve up static files pretty easily (save them to ~/.pow/yourappname/public), and for PHP stuff Sam recommends the rack-legacy gem. Also, at the moment Pow lacks support for SSL serving, though they're working on it.
Bottom line, this is an impressive technical feat and a new tool that a lot of people will find really, really helpful on a daily basis.