Hearsay is a statement that is not made in court (ie under oath) that is repeated in court.

So if I were to say in court "Fred told me Bill killed Brian", the assertion that Bill did that is hearsay, because Fred was not under oath when he said it.

The weight to be placed on hearsay these days is to be determined by the court. It is no longer inadmissible as such.

http://en.wikipedia.org/wiki/Hearsay_in_English_law