A book trailer is a promotional video which does what a movie trailer does: it attempts to entice you into consuming the entertainment for which it was made.
To the cynical, this seems like nothing more than a desperate attempt by the publishing industry to capture the fleeting remains of the world's attention.
A book trailer may contain either readings from the book or depict a scenario associated with the book. It may be either big budget or not. It may include talent well-known to the target demographic or simply feature the publishing company's staff. It may be a powerpoint presentation or a complete film short.
It is questionable whether or not a book trailer is liable to persuade a potential reader anymore than the traditional avenues of excerpts, book reviews, bestseller lists, and blurbs.
Personally, I am not keen on sitting at my computer and watch some dippy montage of images purporting to represent a book. Even if I did posess a smartphone, I simply do not have the level of patience required to watch some fancy bullshit.
After much unrest, it seems clear that if a trailer succeeds in selling even one book, than the concept of the book trailer is not entirely a bad thing.
Two well-done book trailers which are done very differently: Warren Ellis's Gun Machine (read by Wil Wheaton and drawn by Ben Templesmith) and the series done for Nicholson Baker's House of Holes.
Then there are trailers like the one for It's a Book, which basically merge the book's images and words into a short teaser