Continuing my series of posts trying to describe condensed matter topics in relatively non-technical language....
As I've mentioned before, in condensed matter physics, we tend to give particle-like names (that is, ones that end in "-on") to excitations of systems that have well-defined particle-like attributes, like momentum, energy, and angular momentum (such as spin). Plasmons are another example of this, and lately they've become extremely fashionable because it's increasingly clear that they can be technologically useful.
A plasmon is a collective excitation of the electronic "fluid" in a piece of conducting material, like ripples on the surface of a pond are a collective mode of the water molecules of the liquid. The simile here isn't too far off, because like water, the electronic fluid in a metal is pretty close to incompressible. If you push down on the surface of a pond somewhere with a float, the density of the water doesn't change; instead the water elsewhere is displaced, because the water molecules have finite volume and push each other out of the way. The electronic fluid acts similarly, not because of any finite size or even the Coulomb repulsion of the electrons, but mostly because of the Pauli exclusion principle, which tends to keep the electrons out of each others' way.
These electronic ripples can have a well-defined wavelength (which quantum mechanics tells us is related to their momentum). What makes them have a frequency? That is, what makes the plasmon waves wave? When the electrons are displaced, the positive charge left behind exerts an attractive force on the electrons, trying to pull them back to their original positions. This interaction is what makes the plasmons oscillate once they're excited, and these Coulomb interactions are also why plasmons cost energy to excite. These Coulomb interactions with the positive background charge also force plasmons to obey certain boundary conditions at the edges of the host metal. As a result, nanoparticles can have discrete allowed plasmonic modes strongly influenced by particle shape, while larger structures (e.g., thin metal films) can have propagating plasmon modes over a broad range of wavelengths. Typical plasmon frequencies are comparable to the frequencies of visible light (i.e., ~ 1015 Hz). Plasmons decay (into incoherent electron-hole pair excitations), eventually dissipating their energy as the sloshing electrons scatter instead of oscillating smoothly, and as oscillating electric dipoles (and other multipoles) radiate.
Plasmons have gotten so much attention lately for several reasons. They may offer a way of shuttling information around on computer chips that naturally interfaces with optics. Plasmons are also associated with large local electric fields at metal surfaces, which can be very useful for certain kinds of spectroscopies and things like optical trapping. Finally, in properly designed materials, plasmon properties can be manipulated so that the overall optical response of a conducting system can be tuned, leading to lots of hope and hype about "perfect lenses" and "invisibility cloaks".