Bullet Time is used to capture part of a movie in slow motion, however it differs from slow motion as the end result gives the effect that the dynamic camera movements occur in 'real-time' whereas only the on-screen action is slowed down (or paused all together).
The goal of Bullet Time is essentially the same goal of slow-motion, to allow viewers to better interpret the smaller/faster elements of an action scene. Bullet Time works better than slow motion in cases as it allows the camera to be moved while the slow-motion action takes place. As an example, in the movie 'The Matrix' the rooftop scene where Neo dodges a volley of bullets from an Agent's Desert Eagle is easy to comprehend because of the action running at around 30 times slower than real-time. If you now imagine this scene played through at full speed, you would miss the fine detail in the scene because the bullets, already very small, move way too fast to be captured on camera or for us to see. As a result it would look like Neo is just falling over, and quite frankly wouldnt be worth putting in the movie.
Bullet Time, apart from having been used in 'The Matrix', now appears in computer games. The PC CDROM title 'Max Payne' allows players to trigger at will the Bullet Time effect so they too can easier interpret the action around them. Many believe this one effect, ripped from 'The Matrix' was responsible for the game becoming such a hit.