Smokeless cigarettes are electronic devices that resemble traditional cigarettes, but they are really more like an atomizer. They work by vaporizing a solution that usually contains small amounts of nicotine. The solution is usually flavored to taste like tobacco, although there are other flavors available. The solution is vaporized and inhaled, and what is exhaled as "second hand smoke" is really no more than water vapor. This makes smokeless cigarettes popular in places where smoking is not an option.
You can take a look at some of the many smokeless cigarettes at LeCig.com to get a better idea what smokeless or e-cigarettes are like. Although they are unlikely to completely replace smoking altogether, many people are excited about the prospect of being able to get their nicotine fix without having to light up and destroy their lungs.