A blog trackback is basically a tap on the shoulder to another blogger. Consider this scenario to further explain trackbacks:
Imagine you are reading your friend Bob's blog about the New York Knicks. Bob published a great post about a recent game between the Knicks and the Orlando Magic called The Knicks Rule.
Now, imagine you write a blog about the Orlando Magic, and you decide to write a post that talks about Bob's The Knicks Rule post. As a courtesy, you could send Bob an email to let him know you wrote about his post on your blog, or you could give him a call. Luckily, the blogosphere makes that courtesy call a lot easier and gives you an opportunity for some self promotion, too.
To let Bob know you wrote about his post on your blog, you can link directly to his The Knicks Rule post from your own post and follow the steps in your blogging software to create a trackback link on Bob's post.
A trackback creates a comment on Bob's post with a link directly back to your new post! Not only have you completed your courtesy call with your trackback, but you've also put your link in front of all of Bob's blog readers who just might click on it to see what you have to say about the topic. It's simple and effective!
How Can I Create a Trackback?
If your blog and the blog you want to link to using a trackback are both hosted through Wordpress, you can simply include your link as you normally would in your post, and a trackback will automatically be sent to the other blog. If you and the other blogger use different blogging platforms, you'll need to obtain the trackback URL (or permalink) from the other blog post. Typically, this can be found at the end of the post (possibly through a link called 'Trackback URL' or 'Permalink'). Keep in mind, not all blogs allow trackbacks, so it's possible you may not be able to find a trackback link on some blog posts.
Once you have the trackback URL from the blog post you want to send a trackback link to, copy that URL into the 'Trackbacks' section of your original blog post. When you publish your blog post, the trackback link will automatically be sent to the other blog. Some bloggers hold all comments (including trackbacks) for moderation, so it's possible your trackback link may not appear on the other blogger's post immediately.
That's all there is to it! Trackbacks provide a courtesy tap on the shoulder and self promotion all rolled into one.