SHSH blobs, despite the slightly comical name are extremely important in the world of iOS jailbreaking. See, the problem with jailbreaking iOS devices is every once in a while you might need to revert to an old firmware version, something Apple isn't too keen on.
When attempting to flash an iDevice with a firmware other than the most current one, iTunes will contact Apple's servers for authentication and because your version of iOS is older than the one currently installed, the server refuses.
Luckily this can be gotten around as with so many things in tech - and this is where SHSH blobs come in, along with a new tool by hacking friend iH8sn0w called iFaith...