In regular knitting you form the knit stitch by putting your needle through the front loop on the needle. To knit through the back loop, you form the stitch in exactly the same way, but on the loop at the back of the needle instead of the loop at the front of the needle.
This is a little confusing to some because they're really the same loop, but it's the part of the loop that's behind the needle that you knit through to knit through the back loop.
Knitting in this fashion produces a twisted stitch, which can be used for great decorative effect. To see knit through the back loop in action, check out the rice stitch.