Occidentalism ties in closely to Orientalism in its basic form. The easiest way to explain is to start with a quote from research professor Stein Tønnesson. "Assuming there really is something we may call a Western cultural hegemony or cultural imperialism, then 'orientalism' is its literary and social scientific form, and 'occidentalism' is a programme for revenge."
What does this mean? It means that Orientalism is the essential misinformation about the culture of the West in the Middle East, and vice versa. In the view of many people in the Western world, the Middle East has been in a static state. Especially in the 1800s, "scholars" would read old texts from the 1700s and try to apply it to current conditions in the Middle East as if nothing had changed since then. See Rudyard Kipling's "The White Man's Burden" for a good example of how it was applied.
The bias can be called Westernism, and it is basically what stems from not understanding what another has. (I don't use America and the West in general interchangibly, but the application of my example of the current war would make it hard to seperate, due to the large influence America has in the West in general.) The result can either be that a culture desperately wants what another culture has (even though they don't understand it), or that a culture desperately loathes another culture based on what they think they know. In light of recent events it can be seen how it goes both ways. Some Americans loathe the Middle East as a whole, just as some Middle Easterners hate the Western influence. At the same time, there is an obsession with American culture going on all over the world where everyone has cell phones, watches American movies, and listens to punk music. There is a Kentucky Fried Chicken within eyeshot of the Sphinx.
But the desperate want of culture from America is not just a material thing, it is also the wanting of the liberalism and freedom. Just as much of the West doesn't understand how the Middle East operates, much of the Middle East doesn't understand how we operate either. Many are under the false impression that we live in a direct democracy where we are in charge of picking our government at any level. Therefore, the assumption is made that we are a kind of representation of our government and that the entire power structure and decisions of the government are up to the people. Hence much of the hatred for not only the government of the United States, but its people as well. Again, the same hatred goes the other way, when people assume that every person from Afghanistan or Saudi Arabia knew who Osama Bin Laden was, or that the entire Middle East has the same political make-up and/or religion.
The study and knowledge of Orientalism and Occidentalism is hugely important, especially now, because lack of knowledge is what essentially fuels hatred. Having a background on how somewhere has developed and where certain misconceptions may come from gives insight into the motives and viewpoints fueling the spread or oppresion of people or cultures.
Sources:
http://nias.ku.dk/Nytt/Thematic/Orientalism/orientalism.html
http://www.nybooks.com/articles/15100