It's when they take regular sugar and change its chemical composition so that it more closely resembles an alcohol molecule than a sugar molecule, hence the name (no actual alcohol to them). They are touted as this wonderful thing for people who aren't supposed to eat sugars--namely diabetics. They make you think that you can eat all you want without affecting your blood sugar, but that's not true. It doesn't affect you as much as table sugar and it takes longer to do it and causes a rise rather than a spike, but it WILL affect blood sugar levels. Not to mention that it causes really stinky gas, cramps and diarrhea in regular people who eat too much. By "too much" that usually means more than a couple pieces of candy or two cookies or so. We're talking very small amounts to bring on the stinky gas and just a little bit more for the cramps and diarrhea (also stinky). The only reason I can figure that anyone uses it at all is becuase it's cheaper than Splenda (which you can also, supposedly, bake with).
All you need to know, though, is that they are found in sugar free products, including gums and mints. 1 gram can lay me up in bed for two days with horrible gas, diarrhea, cramps and the awfulest gut rumblings and vibrations you can imagine. I liken it to my intestines trying to relocate to a different zip code. I'd say I was out-and-out allergic to them, except that I don't get rashes or hives or any actual allergy symptoms. I just have a really bad reaction to them.
Products are required to list sugar alcohols on the label where they list sugars and carb content. You can also find them in ingredients lists with the ending -itol: like sorbitol, xylitol and mannitol.
In addition to staying away from anything labeled "sugar free" also be sure to look at the labels of anything "low carb" that might contain a sweetner and anything labled "low sugar." The low sugar Slim Fast bars have something like 24 grams of sugal alcohols in them!!! My finace (who can tolerate them) said that amount would mess up even his stomach. I'd probably have to go to the hospital if I ate that much. The only no-sugar product that I have seen that is usually without sugar alcohols are sugar-free jellies; they sweeten them with concentrated fruit juice, usually from grapes. I found out the hard way that sugar-free gum also contains sugar alcohols, so you have to stay away from them too.