A lifeline is a string threaded through a row of knitting to hold the place. You take a smooth yarn of a contrasting color and put it on a darning needle (non-sharp) and work it through each stitch, then keep going knitting through the stitches. Later, if it's turned out to be a terrible mistake, you can yank the needles out, frog it back, and the lifeline will stop the ripping back at the point that you put it in, and you can fairly easily get those stitches back onto your needles and start again.

Think of it as the knitting equivalent to a video game's save point.

Here, have a picture - second picture in this article shows a lifeline:
http://www.knitty.com/issuesummer07/FEATsum07KLM.html