VTOL (usually pronounced "vee-tohl" in acronym
form) is a mode of operation for airplanes. It stands for V
ff and L
anding. As the name implies, the designation indicates that airplanes of this type can take off straight up and land straight down, obviating
the need for a runway.
This capability cannot be had without paying a penalty in performance, however. Airplanes are designed to fly forward and use aerodynamic lift to remain airborne; since rising and descending vertically mean that they cannot be moving either a) fast enough or b) in the proper attitude to use such lift, it is necessary for them to utilize pure thrust to achieve VTOL capability. Since very few airplanes can generate enough thrust to completely support themselves, and even fewer can do so in a manner that allows them to hover or ascend/descend slowly in a controlled manner, and even fewer are able to transition from this mode to and from normal flight, the number of true VTOL airplanes is quite small. In order for most of them to do it, they usually must be restricted to carrying a smaller-than-usual load of fuel and stores, meaning that when they are used in this manner, they are limited in their range and mission capabilities.
There are a few reasons you'd want airplanes to be able to do this, even though they might be handicapped by doing so. The obvious reason is that it means you don't need a big, expensive and/or vulnerable flat runway in order to operate the airplane. This allows you to operate the airplane from hidden spots, or from a place where size is difficult to achieve, namely from aboard a ship (where every inch of runway has to be built and moved). The advantage of using a VTOL airplane rather than a helicopter is that once a VTOL airplane has transitioned into normal flight, it can typically fly much faster and for a longer range than a helicopter.
There have been several VTOL airplanes in aviation history, and new ones are continually being developed. Most recent versions are V/STOL or ASTOVL rather than pure VTOL airplanes; this allows them to operate with larger payloads when more space is available, and makes them more controllable and reliable when in vertical-thrust regimes.
Several methods of creating these airplanes have been tried. Initially, designers tried simply making an airplane with enough engine thrust that if the airplane stood on its tail, it could 'hover' on its jet or prop thrust. While this is attractive to the designer because it requires the fewest changes to the actual airplane design concept, it is not very workable because it is almost impossible to design a control system and cockpit that allows a pilot to transition from a 'tail-sitting' attitude to forward flight or vice-versa without stalling and/or toppling the airplane.
Another method, which was used in the now-famous AV-8B Harrier 'Jump Jet', is to send the thrust generated by the airplane's jet engine through a number of ducts rather than through a single large exhaust nozzle. Through gimbals and vanes, this thrust can then be redirected downward or at an angle, so that rather than the airplane having to transition from a level to 'tail-down' attitude, the engine exhaust can just swivel. While this is much, much more controllable, problems remain; the jet engine is a very efficient and reliable means of producing thrust, however, very few airplanes need anywhere near their own weight in thrust output to achieve very high performance in level flight. As a result, airplanes whose engines are big enough to do this are fairly 'overpowered' for their size; this makes their fuel consumption quite high and limits their range. In addition, the stresses imposed by the larger engine and its higher performance place unduly stringent design restrictions on the airplane. The Soviet Union manufactured a STOVL airplane similar to the Harrier named the Yak-38, code named the Forger by NATO nations, for use off their Aviation Cruiser classes of ships. The British and other nations use Harriers from their smaller, 'ski-jump' deck aircraft carriers. The use of STOVL or VTOL aircraft sharply lowers the design and operation cost of an aircraft carrier, as you don't need catapults, restraining and trapping systems, etc. etc.
The V-22 Osprey, a recent VTOL-capable airplane being built by the U.S., takes a different approach (called tiltrotor, thank you FloriZla!). Rather than using jet engines, it has two large turboprop engines mounted on its wings. The propellors are extremely large, and the wing itself can rotate so as to direct the thrust from the propellors straight down, turning the airplane into a form of helicopter. Because the turboprop is better at producing stable lift (the blades produce a wide, strong thrust) the Osprey can lift heavier loads and transition much more easily. The penalty in its case is its fairly low maximum speed, as dictated by the enormous propellor cross-section.
Finally, the Joint Strike Fighter candidates (and final selection, the X-35) are two recent attempts at STOVL airplanes. One uses the already-described and fairly mature ducted thrust system; the other (winning) airplane, however, uses a different approach. While it, too, can at least partially redirect the thrust from the jet, rather than being vented downwards to produce lift, the thrust is utilized to spin a large vertical fan mounted in the center of the airplane called a lift fan. This more-efficient use of the jet's power allows the airplane to lift off with higher loads and operate without running its engine as hard. The extra weight penalty of the systems that are only necessary for the lift fan are compensated for by the fact that the jet engine is smaller than it would otherwise be.
VTOL is a magnificent thing to watch. It's one of those times when the true marvel of technology is apparent even if it's the five hundredth time you've seen it in action - unlike the fast-moving airplane, a VTOL aircraft wobbling up off the ground is a much more personal and immediate apparent violation of the laws of physics, and as such will stick with you for long after you see it in action.