"...you multiply the amount of each transaction by the number of days since those coins were last spent. So, 1 bitcoin that hasn't been spent in 100 days (1 bitcoin * 100 days) counts as much as 100 bitcoins that were just spent yesterday (100 bitcoins * 1 day). Because you can think of these "bitcoin days" as building up over time until a transaction actually occurs, the actual measure is called "bitcoin days destroyed". This is believed to give a better indication of how much real economic activity is occurring on the bitcoin network."

http://bitcoin.stackexchange.com/a/847