What is a 'Target Server' in a SQL Server Agent Job?
A Target server allows the job to be run against a different server than the one it is defined on.

Multiple Target Servers allows you to define a job once (say a routine backup job) and have it execute against many servers (thus backing each of them up).

UPDATE:

MSDN Documentation here:  http://msdn.microsoft.com/en-us/library/ms180992.aspx