In reply to jon:
In short words. You find a load of points on the surface of an object, and store their positions and colour.
Then you can view the object by drawing little coloured blobs at the positions of all the points.
You get the points either by using a laser scanner or taking lots of pictures from different positions and using software to match points in the images and figure out where they are from the relative parallax.
It has advantages and disadvantages relative to storing the 3D model as triangles, which is the usual approach.
Main advantage is that if you start with a load of points from a scanner you don't have to go to loads of effort to figure out what is connected to what and stitch them together. It also takes less memory.
The main disadvantage is that it is more expensive to draw and things look blobby when you zoom right in.