As suspected by many, it’s an online game in the vein of Game Neverending, the gaming project that eventually became photo-sharing Flickr. Glitch is a massively-multiplayer game, playable in the browser and built in the spirit of the web. It is currently in development and will launch late in 2010. Private alpha is beginning shortly and a public beta period will begin this summer.
It's called Glitch because in the far-distant and totally-perfect future, the world starts becoming less and less probable, things fall apart, the center cannot hold, and there occurs what comes to be called the "glitch" — a grave danger of disemprobablization. This results in a time-traveling effort at saving the future, going back into the minds of eleven great giants walking sacred paths on a barren asteroid who sing and think and hum the world into existence and ... you know what? You'll probably just have to wait and play the game :)
If you're intrigued, be sure to check out the teaser video on the Glitch website. And if you'd like to learn more, check out Daniel Terdiman's exclusive interview of Butterfield over on cnet.