As the College Board folks say, Subject Tests let colleges know what is unique about applicants and in what areas they excel. They are one hour, multiple choice tests in math, science, history or languages. There are currently 20 subject tests available. Harvard and Georgetown, the last two colleges that required three subject tests, no longer do. The writing component of the SAT has proved to be a good indicator of success in college, and that element of the SAT has led, in part, to less emphasis on subject tests.
Some educators think that is a real shame. Subject tests measure a student's in-depth grasp of a subject in ways the SAT cannot. Also, coaching isn't all that effective for subject tests -- so they have seemed to be more accurate measures of ability. And even if schools don't require subject tests, the tests do add an extra dimension to an application, providing one more way that a student can stand out.
Subject tests are usually taken at the end of a school year, when a class is completed. Up to three tests can be taken on a single day. So, at least for our sophomore, the first potential subject tests are a 2011 event. Still, it's something to think about as the school year progresses.
Here's a good overview of the subject of Subject Tests.