Personas are a model used to describe users' goals, skills, abilities, technical experience and context... They are used by the design team (and larger project team) to describe, and keep front and center the user(s) for whom the system will be built.
I've been working on persona development the last couple of months.
The Fluid Project wiki is proving to be a great resource.
Persona development resources - the Fluid Project
I also bought a book the other month: "The User Is Always Right" by Steve Mulder with Ziv Yaar. Steve's blog promotes the book and he also posts links to related material and resources.
Practical Personas blog by Steve Mulder