A "retweet" is a reply to a tweet that includes the original message or a tweet that includes a link to a news article or blog post that you find particularly interesting. Like hashtags, retweets are a recent community-driven phenomenon on Twitter with the aim of making the service better and allowing people to follow discussions easier.
How do I Retweet?
Retweeting is very easy.
If you are retweeting as a reply to a tweet or direct message, simply type in your reply, follow it with "RT" to signify it is a retweet, the @username of who you are replying to and end with the original message.
So if @tom asked you "how are you doing?", you would reply: "pretty good RT @tom how are you doing?"
If you are retweeting a news article or blog post, simply type in your comments, follow it with "RT" and then the link to the article. For example, "This is a great article RT http://bit.ly/BS261".
When should I Retweet?
There are no set rules about when to retweet, but in general, you should retweet when you find something particularly interesting or noteworthy. For example, if someone you follow tweets something that is absolutely hilarious, that would be a great time to retweet. Or, if you want to let your followers in on a conversation you are having, that would be another good time to retweet.
Avoid retweeting articles and blog posts simply because they have a "Tweet This" button or a link to send the article out on Twitter. If the article is meaningful to you in some way, by all means, tweet it. But avoid tweeting simply because you thought it was a good or solid article as this will just contribute to Twitter spam.
Remember, Twitter is all about you, what you are doing, what you are thinking and how you feel. Tweeting an article you just happened across is not nearly so meaningful as tweeting an article that really said something to you.
Find the definitions to more terms in the Twitter Glossary.