A hat tip is an acknowledgement to someone (or a website) for bringing something to the blogger’s attention.
Hat tip is also, sometimes, abbreviated as h/t or HT.
In addition to acknowledging someone else's work (hard or not), the hat tip is a great way to expand your readers blog reading universe. Its a way of telling them, "did you find this post interest? Well, let me tell you about this other blog over here that writes about this stuff all the time!"
Done well, it helps expand the number of relevant blogs around you, increasing your relevancy as well.
Done poorly, it makes you look stupid:
If you find something via another blog or even get an idea from another blogger, you should give the blogger credit. Sometimes this is called a hat tip (or h/t) and sometimes you'll just say "via" and then link to the blogger. Failing to do this can get you in trouble fast. Bloggers are resourceful, too. You can't really hide! There once was a woman who liked my own blog so well, she copied it right down to the name and the weekly features! Once I caught her, all my blogger friends jumped all over her! Not a good way to make friends.
Imitation is the sincerest form of flattery, but at some point, if a blogger repeatedly refuses to acknowledge the source of his inspiration and it's obvious (and it will be) where it came from, readers will pick up on it, they will wonder if you have any original ideas of your own and they will begin to think of you as a phony. As in the real world, whispers behind the back occur in the blog world. If someone is guility of using other blogger's work, the offender may notice his statistics going up, or frequent visits from the same source. That's because once you're tagged with this label, people will check in on you frequently to see if this pattern continues. They will take notes and they will tattle on you.