What does HBOOT mean? My best guess as of now is "partition and mount point layout". But it feels like there's more to it, since the bootloader can identify the HBOOT by name.

I've been flashing custom ROMs for quite a while now, but I still haven't quite grasped what HBOOT really is or means.
HBOOT is bootloader. It lives inside NAND's first partition, mtd0 (if partition map is MTD). It is loaded in memory (RAM) when device is switched ON. Its jobs are:


Check the Hardware.
Initialize the Hardware.
Start the Operating System (Either Android or Recovery).


HBOOT can also support doing more than this like flashing ROMs.

Something More: Nandroid backup and restore don't touch HBOOT.