Here is Wyatt Cheng (Senior Technical Game Designer of Diablo 3) explaining it: http://us.battle.net/d3/en/forum/topic/19890789607
I want to clarify a few things about many recent discussions of snapshotting and make sure we’re all on the same page as to what that means.
Snapshotting is very fundamental mechanic in Diablo III that allows the game to work correctly and according to player expectations most of the time. It's a bit like having electricity in your home; you never really think about it when it's working correctly, but you sure do notice when it's not! By and large most skills should snapshot the state of your character at the time your ability is used unless there is a good reason not to. This is what allows you to cast Rend just before Wrath of the Berserker expires and retain the damage bonus. You hit that monster really hard didn't you? Not only does Rend snapshotting the damage at the time the ability is cast allow for skilled players to time their abilities for maximum effect, it's also what you would expect the skill to do mechanically—bleed a lot because you hit really hard! As another example, you wouldn’t want to have a character equip a very high-speed dagger, cast a bunch of projectiles, and then switch to a high-damage two-hander to artificially boost your damage by using the damage of your character at the time the projectiles landed. Projectiles should do the damage the caster had at the time the projectile was fired. They need to snapshot.
All of this is the intended and necessary design of Diablo III.
This brings us to the confusion we see when people refer to snapshotting as if it were a global bug. There’s a huge, important difference. While most skills should snapshot, some skills and items with long or persistent effects should instead update continuously. To use my analogy from earlier - sometimes the light switch doesn't work and you REALLY notice. [...]
So basically, snapshotting is extending the time/power of your skills or buffs and as stated by Wyatt Cheng, it is a part of the game.