This
reference means more than "
let's be friends" in the fictional
Tamarian language; it suggests uniting against a
common enemy, despite whatever reasons there may be for a
cool diplomatic stance.
The episode Darmok (TNG) got its name from this utterance because the unspecified backstory of Darmok and Jalad at Tanagra seems to be isomorphic with the plot of the episode itself. Picard finds himself in a wasteland along with Dathon, a Child of Tama, and their apparent misgivings toward each other are quickly eclipsed by a greater concern -- a mysterious energy beast.
Like Darmok and Jalad, the two ambassadors became willing to at least turn their backs on each other to face their common foe. Eventually, the situation leads to some common ground for further diplomacy, and this first contact becomes known as Picard and Dathon at Eladril.
SOURCE: The Darmok Dictionary, http://www.chaparraltree.com/sflang/darmok.shtml