This refers to when a person prays for someone who is need by laying their hands on them during their prayer. This is viewed by some as simply a way to associate with the person in need. Others see this as a transferrence of energy. An example of this was when the lady with the issue of blood touched the hem of Jesus's garment and was healed and Jeses said he felt "it" leave his body.
Personally, I think it is an important part of prayer if you are interceding with someone on a 1-to-1 confrontation. Scientists have shown that it actually does effect people who are sick in the hospital when someone touches them while praying. The explanation may be complex and it could be pyschological or spiritual but if it works then don't deny it.