The United States Bureau of Export Administration regulates the export of sensitive technology to potential doers of evil, and the Entity List is just one of the mechanisms they have to decide who is good and who is evil. Companies and organizations on the Entity List are those who, in the view of the U.S. government, should not be allowed access to technology that could be used to develop weapons of mass destruction, primarily nuclear warheads and ballistic missiles. The Entity List also regulates the export of cryptology—when you download that nice new 128-bit encrypted browser, you have to certify that you aren't on the Entity List. In case you aren't sure, here's the whole list, as of December 20, 2001:

People's Republic of China

India Israel Pakistan Russian Federation