The Tallit (also sometimes spelled Tallith) is a Prayer Shawl worn by Jewish men and after they reached their Bar Mitzvah (13th Jewish Birthday) for boy. The Tallit is used during the morning prayer, on all weekdays (including Sabbath and other holydays). It is not worn for afternoon and evening prayers.
The Tallit itself is a white rectangular piece of fabric, which is usually made of wool, but sometimes is made of cotton, poliester or silk. On each of the four corners of the Tallit are special knots called Tassels (Tzitzit) in fulfillment of the biblical commandment:
Speak unto the children of Israel, and bid them that they make them fringes in the borders of their garments throughout their generations, and that they put upon the fringe of the borders a ribband of blue:
And it shall be unto you for a fringe, that ye may look upon it, and remember all the commandments of the LORD, and do them; and that ye seek not after your own heart and your own eyes, after which ye use to go a whoring:
That ye may remember, and do all my commandments, and be holy unto your God.
The purpuse of the Tallitis to hold the Tassels, so the Tallit itself has no religious meaning. The purpose of the Tzitzit (according to the Torah) is to remind us of God's commandments. Many Tallitot have blue or black stripes woven in along the shorter ends. They also commonly have an artistic motif (also called Atarah or crown) of some kind along the top long end (the part that goes against your neck). There is no particular religious significance to the Atarah, it simply shows which side of the Tallit should be up.
In the old days the Talit was a rectangular mantel that looked like a blanket and was worn by men. Initially, the Tallit was worn daily, as part of the clothing, but after the exile of the Jews from the land of Israel and their dispersion, they came to adopt the fashions of their gentile neighbors and the Tallit became a religious garment for prayer; hence its meaning of Prayer Shawl.