Visual coding is part of short-term memory. This is often used when acoustic code can't be used, either because of interference or because what you are remembering needs visual representation. A picture of a car may usually be remembered as an abstract, semantic representation 'car', but if a pesky experimenter is having you recite a list of nonsense syllables, or if you are going to need to draw it later, you'll use visual coding instead, remembering the visual image rather than the word. This visual coding is simply the picture of a car that you have in your head.
Everyone is different, of course, and some people will tend to use visual coding by preference (subconsciously). If you have really good visual coding skills, you may be said to have photographic memory.
The other parts of short-term memory are acoustic code and semantic code.