Wikipedia defines it as "the forecasting of one's affect (emotional state) in the future." It turns out that, because our thinking has all kinds of blind spots, we humans are pretty poor at it. In other words, it's "The Big Wombassa", in the memorable words of a hotshot Hollywood actor, as quoted by John Brockman in the Edge article on Harvard psychologist Daniel Gilbert (whose Stumbling on Happiness is something I hope to be able to get soon -- it's just out in paperback).
The Smithsonian Magazine has a short interview with Gilbert, in which he explains the concept:
Human resilience is really quite astonishing. People are not the fragile flowers that a century of psychologists have made us out to be. People who suffer real tragedy and trauma typically recover more quickly than they expect to and often return to their original level of happiness, or something close to it. That's the good news—we are a hardy species, even though we don't know this about ourselves. The bad news is that the good things that happen to us don't feel as good or last as long as we think they will. So all that wonderful stuff we're aiming for—winning the lottery, getting promoted, whatever we think will change our lives—probably won't do it after all. We're resilient in both directions. We rebound from distress but we also rebound from joy.