what is it and why does it matter you ask?
"Standard 8-bit images use values from 0 through 255 to cover the range from black to white. 16-bit images up the ante by allowing you go from 0 all the way to 65,535. In both though, black is still black, and white is still white. All the extra values that 16-bit provides are slotted in between the standard 8-bit values so we really still have about the same dynamic range for each. We can just represent things more accurately in 16-bit mode.
The main limitation with all RGB systems is that they are geared to describing what color something is, not how bright it is. The CIE L*a*b color model improves things somewhat by separating the color components (the "a" and "b" channels) from the lightness or luminance (the "L" channel), but the range of available brightness values is still rather limited.
To represent the real world, we need a relatively open ended brightness scale, and that's exactly what HDR provides.
Rather than using regular integers (the numbers we count with) to record things, HDR uses floating point numbers. If you've used an ordinary pocket calculator, you are probably already familiar with floating point, but just in case, allow me to explain briefly. Sometimes referred to as exponential notation, floating point employs a fractional number (officially known as the mantissa) which is multiplied by some power of ten (known as the exponent). For instance, if you have a calculator with a nine-digit display that reads 999,999,999 and you add one to it, you get 1e+09, or 1 x 109. Multiply the same number by a million and we'd have 9.99999999e+14. This way, we can keep on counting for a long, long time. Also, no matter how high we get, the precision is retained since the mantissa still has the same number of significant digits. Negative exponents let us get ever closer to zero as well with no loss of precision. For all practical purposes, this gives us essentially limitless dynamic range." - from earthboundlight.com
now that you're more confused than ever, allow me to show you an example... the picture below is a HDR image combined from the 3 thumbnails below.
If we were to look at this in person, we would be able to discern detail both inside and outside the doorway, because our eyes would adjust to changing brightness. The goal of HDR use in this article is to better approximate what we would see with our own eyes through the use of a technique called tonal mapping.
pretty cool, huh?