Originally posted by Hecubus
Its what seperates a suspension fork from a pogo stick. Basically when a fork is compressed, the spring, wether it be coil or air based, will push back to return to its original position. The result is the suspension will basically try to catapult you off the bike. Rebound damping is usually an oil based system that forces the fluid to pass through a small valve as the fork returns to its starting position. The valve only lets so much oil pass though at a time slowing down the return rate of the fork.
Rebound adjust means that the rebound valve can be adjusted so you can tune the fork and make it return (or rebound) at the speed you most like it. Usually light riders use a slower rebound setting so the spring doesn't kick back too hard and a heavier rider will use a faster rate so the spring can compensate for the extra weight.