Basically, a fuzzy logic is a large group of boolean logic (degrees of True and False values), also called partial truth. But instead of dealing in 1 (yes) or 0 (No), it deals with degrees of truth, close to the  possibility theory. 

A fuzzy logic controller ( FLC ) is an intelligent control system that smoothly interpolates between rules. In autonomous systems, tasks are generally performed based on evaluation of sensor data according to a set of rules/heuristics furnished by a human expert who has learned them from experience or training.

Resent research and applications employing non-analytical methods of soft computing such as fuzzy logic and neural networks. Fuzzy logic has proven to be a convenient tool for handling real-world uncertainty and knowledge representation.

More detailed Articles on Fuzzy logic:
Fuzzy Logic article on Wikipedia
Good Newsgroup on the subject