Translation memory is a technology that saves phrases and sentences which have been translated. Whenever the same word or phrase appears in the document for translation, the software will look up the word in the database and give you the choice of using the same translation for that word again. This helps you to save time when translating, and also maintains consistency of the terminology throughout the entire document.
Translation memory is useful for complex translation jobs with multiple translators working on the same project. These translation tools (eg. Trados and SDLX) make the translation process cheaper, more streamlined and more efficient.