Hyper-reality (or hyperreality, depending on your source) is a conecpt associated with philosopher Jean Baudrillard, who argued that, as a result of the spread of electronic communication, there is no longer a separate "reality" to which television programs and other cultural products refer. Instead, what we take to be "reality" is structured by such communication itself.
Jean Baudrillard himself is something of an unusual character. A French intellectual, post-modern critic, and an extreme proponent of post-modernity, Baudrillard looks at how our postmodern world is no longer real, but only a simulation of the real. His general philosophies and writings revolve around the idea that media has altered our perception of the world to such a degree that we actually no longer perceive the world as it really is, but as an artificial shell of reality.
A strong example of hyper-reality, as defined by Baudrillard, is that the items reported on the news are not just about a separate series of events, but that instead these reports actually define and construct what these events are. For example, he argues that the Gulf War in reality never happened; it was instead a fabrication of the media.
Most philosophers believe that the concept of hyper-reality has some limited merit, but that Baudrillard is perhaps stretching things a bit. In the philosophy community, the general belief is that media and communication tend to distort reality, but is incapable of replacing it because reality serves as the foundation of media and communication. In other words, without real feelings, events, or emotions, media could not exist and could not distort it.
A strong example in favor of the hyper-reality argument is the advent of internet-based memes. In the digital age, information can be instantaneously reproduced at the click of a mouse button, and often travels around very quickly. When an email message is forwarded or a meme is communicated via weblog or by instant messaging, a particular piece of information is immediately duplicated for you; I didn't create it or alter it in the least, as the original message or meme remains unchanged. Thus, it can be argued that the information is autonomous, which supports the theory of hyper-reality. A specific example of this is the infamous forwarding of the supposed Kurt Vonnegut MIT address that never happened; this piece of information was entirely false, but the widespread availability of electronic communication made the information able to be distributed so widely that it became true for many people long before it had a chance to be retracted, thus creating a false reality, which is exactly what hyper-reality proposes.
A strong example opposing hyper-reality is the ongoing fighting in the Middle East between Arabs and Israelis, the latest incarnation of a battle that has been waged there for thousands of years. It is very hard for media to distort the core fight here; it has been waged with such emotion and conviction for so long that it is undeniably a part of the real world that we live in; this event is real. One can go there and witness the fighting directly; the media can at most distort the facts. The existence of reality itself that one can witness and media can at most distort is the most convincing counter-argument to hyper-reality that one can find.
Hyper-reality is an interesting philosophical concept developed by an interesting philosophical mind. Whether it is truth is up to thinking minds to decide for themselves.