Crema is a polyphasic foam created when pressurized brewing water brings soluble coffee flavors -- mostly lipids -- into solution.
-David Schomer; "Espresso Coffee: Professional Techniques."
When Achille Gaggia first introduced his spring piston machine in 1948, it was the first machine with enough pressure to create lasting crema. Written on the machine was the slogan "Crema Caffe Naturale". People would ask what the peculiar scum on their coffee was. He told them his new method of extraction made coffee so rich, it made its own cream!
In the years after, crema has been a sign of a properly done espresso. A rich dark brown foam with lighter brown flecks, thick enough to hold a demitasse sized spoonful of sugar.
A number of factors are needed to produce good crema. Freshly roasted beans (no more than a week old), properly ground beans (ground using a coffee mill, and extracted immediately after being ground), a good machine (one that can maintain uniform temperature and will provide enough pressure), and a firm, even tamp. The type of beans used have a notable effect on crema as well. Unwashed beans such as African and Indonesian produce more crema, as well as blends that contain even a tiny amount of robusta.
However, in the last few years, real crema has been harder to define. Many home machines now sport crema enhancing features, such as crema disks and pressurized portafilters. Crema is not so much a sign of perfect espresso anymore, but of a more technologically advanced machine.