A pie menu is a list of menu items arranged not in the usual, dropdown menu style, but instead splayed out from a central point. The idea is to minimize the mouse movement, and therefore the time wasted, between a menu's opening, and user selection from that menu.

In other words, when you click on Edit, you get this:

    _______      _____        
   |_Undo_ \    | Cut_|           
          \ \__/ /_______          
           | Edit___Copy_|                   
   _______/ /  \ \______         
  |_Redo___/    \_Paste_|       

Instead of this:
|           |
| Undo      |
| Redo      |
|  _______  |
|           |
| Cut       |
| Copy      |
| Paste     |

Making the pie menu translucent would also be a good interface decision, as it would allow the user to see any context that might have been otherwise hidden by the menu. There are deviders in the pulldown menu allow it to have menu items in groups. This could be done in a pie menu by having the legs and text be different colors for different functional areas. Shortcut keys might be shown on the pie menu with a second line on each node, or with a tooltip-like (but again translucent) popup. All of the GUI components you can have in a pulldown menu, you can also have in a pie menu.

There's really no excuse for today's applications and window managers having anything but pie menus. In the past, it wasn't done because these menus take up a largeish amount of screen real estate. Today, however, with 1024x768 being the lowest resolution you're likely to see, the speed, efficiency, and information density of pie menus outweigh this small disadvantage.