What is it?
An image map takes any kind of image and divides it up into different areas, and creates a separate hyperlink for each of those areas. For example, I used to run a course on using computers for small-scale surveys, and in order to try and add some interest to the Moodle course page I created the following image map - a basic picture of iPhone app icons, each of which had been mapped to course content area. The effect is that by clicking on an icon you are taken to the content related to that topic:
In the past I used Photoshop for this, but to be honest it was rather like using a sledghammer to crack a walnut - especially when this free online Image Map Tool does the same thing so easily and without the need for a hefty financial investment in software. To use the site, simply upload your image and use the drag tool to select different areas. Then assign a link to each area and bingo! The site generates the html code which you can then paste into your website!
Why might you use it?
Since it is an html thing, most likely on your blog or your website. Again, as a teacher, I have used it quite frequently in Moodle. It is a really nice way to make your student interface just a little bit different and interesting.