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Cargo pants are pants designed much like khakis only with a large utility pocket (roughly the size of a CD jewel case) on the outside of each leg at about knee height.

In my experience, they come in three flavors:
loose - something like a comfortable pair of slacks
baggy - for those who find don't like the feel of wearing pants but like wearing them
far too big - who invented these?

The utility pockets tend to come in really handy if you're a geek with a lot of toys. Things I sometimes carry in the pockets of my cargo pants in order of frequency (highest first):

I've also heard them referred to as pants of holding (+1).

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