Definition: HDMI stands for High Definition Multi-media Interface. To transfer the digital video signal from a source to a TV, the source must convert the signal from digital to analog, this results in some information loss.
However, an HDMI output, can transfer a digital video source signal (such as from a DVD player) digitally, without conversion to analog. This results in a pure transfer of all of video information from the digital video source to a HDMI or DVI (via a connection adapter) equipped TV. In addition, HDMI can transfer both video and audio signals.
For additional details about HDMI, check out my reference article: HDMI Facts - An Overview of HDMI
