Somewhere along the line, I apparently missed this term. Wikipedia has a great short definition of it:
The uncanny valley is a hypothesis that when robots and other facsimiles of humans look and act almost, but not entirely, like actual humans, it causes a response of revulsion among human observers.
The first time I saw this term was in a post on Triggur’s livejournal showing some creepy animatronics singing. I looked up the definition, and while discussing it on IRC, Nathan pointed me at a flash page showing a CGI generated woman, who reacts to mouse motions.
As far as I know, that entire image is computer generated, and has some truly scary lifelike elements to it (such as the fact that she’s breathing). Interestingly, it does NOT trigger the ‘revulsion’ response in me nearly as much as some others do, but watching this animation quietly move and look about as I do my work is truly an eerie experience.