It's a thing that lets you change the color and patterns on anything. So you could have bright green leopard print underwear if you'd want.
I think in TS2 you have to download different colors or whatever of hair and clothes? In TS3, you could just edit it however you want. :o
And because I probably explained it really crappily, here's a link that explains it better: http://sims.wikia.com/wiki/Create_A_Style