Well, according to the Justice Department, it doesn't mean anything, officially -- there's no legal definition of the term. But it's generally recognized as shorthand for someone that police want to interview. That person has NOT been charged, though, and thus, isn't a suspect. (Though a lot of times, they eventually are charged.) Police will publicize that person's name as a way to track them down.
Critics say it ruins the reputations of people who are innocent. A lot of media outlets use the term, including the Star and this blog. The American Journalism Review had a good take on the issue here.
Jim Kouri, a spokesman for the National Association of Chiefs of Police, says "person of interest" often is a euphemism for "suspect."
"If it's a suspect and you say 'person of interest,' you're using the euphemism to avoid problems down the line," says Kouri, a former New York housing police officer. What problems? Police sometimes "try to maintain that the person really isn't a suspect" in order to get him to agree to questioning without Miranda warnings, Kouri says. "You don't want the guy to lawyer up."