What is it when....

yes thats a kernel panic. if it happens regularly then something is wrong with your setup. (firstly disconnect all unnecessary usb devices, and try a basic config for a while, if that doesn't help, it might be a software issue.)

i've had about one KP in a year on my macbook. you shouldn't see this very often!

 

Here is the info on Kernel Panics from Apple:

http://support.apple.com/kb/HT1392

And how to help troubleshoot them:

http://support.apple.com/kb/TS1388?viewlocale=en_US

As vandozza said, kernel panics should be extremely rare, if they happen at all. Of the three Macs I've owned since 2007, and the half dozen or so at work I also use from time to time, I've only had one kernel panic, and that was because I mistakenly unplugged a USB hub with devices plugged in, in the middle of a file copy.