LDAP, or lightweight directory access protocol, is a protocol designed to access directory systems over TCP/IP. Because of this various databases provide an LDAP interface such as Microsoft's Active Directory, Novell's eDirectory, as well as more dedicated LDAP solutions such as OpenLDAP.
With the release of Joomla! 1.5, Joomla! has a native LDAP library (joomla.client.ldap) and a native LDAP authentication plugin. This allows Joomla! 1.5 to authenticate against LDAP systems out of the box.
In Joomla! 1.0, there was no native LDAP library or authentication plugin. The JAuthTools project provides a Joomla! 1.0 solution for authentication without hacks as well as configuration resources for both Joomla! 1.0 and 1.5 LDAP authentication solutions.
You can also read a tutorial on getting started from scratch with LDAP.