I hear this term sometimes and am wondering what it is used for?
hashing in general is a useful way to reduce a huge amount of data to a short(ish) number that can be used to identify that image.
They are sometimes intended just to provide a handy way to identify a file without the intervention of a human, especially in the presence of several parallel authors who can't be relied upon to increment some master counter (JPG001 JPG002) without overlapping.
Sometimes hashes are intended to be unforgeable, so that I can say - if the image hash YOU generate is the same as the one I made when I sent you the image, then you can be sure it's from me (and not adjusted by an evildoer). However, not all hashes can make this guarantee, an every few years a popular such 'cryptographic' hash is shown to have fatal flaws.
Umm.... To compare images (in the broad sense, pictures, or any other binaries) fast without comparing entire file?
In practice, image hashing is popular for finding similar images in a sequence of frames or video, or to embed a watermark with various images as many of the movie studios now do (almost hearken back to Fight Club in a creepy sense!).
It is often used for image caching. For example, an instant messenger client can cache user avatar images by first requesting only the hash of the image from the server and if it doesn't find it in the cache, it will download the image.
While normally hashing a file hashes the individual bits of data of the file, image hashing works on a slightly higher level. The difference is that with image hashing, if two pictures look practically identical but are in a different format, or resolution (or there is minor corruption, perhaps due to compression) they should hash to the same number. Despite the actual bits of their data being totally different, if they look parctically identical to a human, they hash to the the same thing.
One application of this is search. TinEye.com allows you to upload an image and find many of its occurrences on the internet. like google, it has a web crawler that crawls through web pages and looks for images. It then hashes these images and stores the hash and url in a database. When you upload an image, it simply calculates the hash and retrieves all the urls linking to that hash in the database. Sample uses of TinEye include finding higher resolution versions of pictures, or finding someone's public facebook/myspace/etc. profile from their picture (assuming these profiles use the same photo.
Image hashing can also be used with caching or local storage to prevent retransmission of a photo or storage of duplicates, respectively.
There are plenty of other possibilities including image authentication and finding similar frames in a video (as was mentioned by someone else).