In order to get useful and realistic feedback from real users, some software companies deliver pre-release software (a beta or beta trial) to a select number of users to try it out and report bugs, make suggestions, or just give significant customers clear evidence of the state of the product.
What is a beta?
In terms of the software development, beta is usually the stage where all major feature implementation should be finished and the software is in the phase of bug fixing, refinement and stabilization before declaring a Final or Release candidate (sometimes called "Gold" as well). Sometimes major changes occur in this stage, but usually only in response to feedback during a beta trial.
Beta, of course, comes after the Alpha stage where major feature implementation usually occurs, is known to be unstable, and not generally fit for anything more than internal trial of carefully selected users. The stage before Alpha some call "Pre-Alpha", "Proof of Concept", or "Prototype".
These stages are semi-formal within the software industry, so "your results may vary".