Why do people put a # in front of certain phrases and stuff on Twitter?

[LittleElmTree]

Novice Tweeter

[rachelohrachel]

That's called a hashtag. Twitter (or some application it uses) picks up on these and compiles a list of "Trending Topics" -- the ten things being discussed the most at that moment.

So it's basically a keyword. If you search "# + whatever subject", you can see a list of all the tweets about that subject. If you put "# + subject" in your own tweets, they will be added to that list.