Pot Odds are the ratio of the size of the pot to the amount of the call you have to make. For example, a pot with $100 in it and you have to either call $10 or fold, then you have 100 to 10 (10 to 1) pot odds on that call. Usually this is written as 10:1.
Compare the pot odds to your probability of winning the hand. For example, if you have a flush draw after the flop, you have a 35% chance of winning the hand by making a flush on the turn or the river. 35% expressed as 3.5:10 shows you how easy it is to compare to pot odds. If you have 1:10 pots odds on the flop call but have 3.5:10 chance of winning, then making that call is easy. This comparison is known as expected value of your hand.
The expected value of a call is calculated by comparing the pot odds to the odds of making your draw that wins the pot. When you have that drawing hand that you know is behind but can win if you catch one of your outs, then you can use the pot odds comparison to determine whether the expected value of your hand is worth making the call. When the chances of making your draw is higher then the pot odds then the call has a positive expectation. A positive expectation, or positive EV, is that in the long run that call will be profitable. On the other hand, if the odds of making your draw are less then the pot odds then the call has a negative expectation. A negative expectation, or negative EV, means that in the long run that call will be unprofitable.
Note, the expected value should be adjusted for implied odds, which takes into account the next round of betting.
Pot Odds are an important concept to understand. Consistently making positive EV decisions and folding during negative EV decisions are characteristics of winning poker players.