It's essentially High Definition DVD - most new TVs are High Defination and have a range of 'resolution' the best being 1080p - the Blu Ray DVD can play movies up to 1080p - not all Blu Ray movies are at this quality but most are.
Also - most modern Blu Ray players upscale standard DVDs to 1080p - most DVDs are 480p - the upscaling is pretty good and you really can see a difference on a top quality HD TV.
Wikipedia: A Blu-ray Disc (also known as BD or Blu-Ray) is an optical disc storage medium designed to supersede the standard DVD format. Its main uses are for storing high-definition video, PlayStation 3 video games, and other data, with up to 25 GB per single layered, and 50 GB per dual layered disc. ...
The surface of a CD is covered with "bumps" that contains the data that is being recorded on it. The surface of a DVD also has these bumps, but more than a CD. Thus, the quality of the picture is clearer. A DVD can hold more information than a CD because the surface area is increased by the increased number of bumps. For a blue ray disk, there are a even higher concentration of bumps than a DVD. This provides a even higher and clearer resolution of the image and audio. It holds even more information than a DVD because the surface area is even more than a DVD. The blue ray disk can only be read by a blue laser because of the way the disk is produced hence the name blue ray. The disk is a layered sandwich and the blue ray reads the second layer.