'Line out' is a port on audio equipment used to connect pieces of equipment together. The distinguishing characteristic of Line Out as opposed to other audio outputs is that it is unamplified and is thus at a consistent level between devices. The corresponding input port is 'Line In'.
In component stereo systems, for example, the outputs on everything but the amplifier are Line Out outputs. This allows a consistent output volume when switching between different sources (a CD player and a turntable, for example). Professional audio equipment is also connected together with Line Out and Line In ports at standard levels.
Most computer sound cards have Line Out ports, which are generally only used when connecting the computer to a stereo system. Speaker systems designed for computer use generally plug into the headphone port rather than line out. The difficulty with computer line out is that the level of the line out is controlled by the sound card's built in mixer, which is also the volume control for the headphone port. Thus, the mixer levels are often set very low, which for the headphone port is useful, but which causes the line out to be almost unusably quiet. The remedy is to increase the mixer level to 100%.
Of late, many devices, particularly DVD players, have also included digital Line Out ports, allowing the devices to directly transmit digital audio over a copper or fiber optic wire. More information can be found at S/PDIF and AES/EBU, the consumer and professional standards, respectively.
This writeup is copyright 2003 D.G. Roberge and is released under the Creative Commons Attribution-NoDerivs-NonCommercial licence. Details can be found at http://creativecommons.org/licenses/by-nd-nc/2.0/ .