What are "hashed and salted" passwords?

I was one of the millions of Evernote users who had to reset their Evernote password this morning due to a security breach, but it seemed like most of the articles I saw about it downplayed the risk because passwords were “hashed and salted.” While it sounds like a great breakfast order for WaffleHouse, what does hashed and salted mean regarding

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Story added 4. March 2013, content source with full text you can find at link above.