(And what's it good for.)
Related MO questions (with some very nice answers): examples-of-categorificationexamples-of-categorification; can-we-categorify-the-equation $(1-t)(1+t+t^2+\dots)=1$?can-we-categorify-the-equation $(1-t)(1+t+t^2+\dots)=1$?; categorification-requestcategorification-request.