Audio Units are a set of application programming interface (API) services provided by the operating system to generate, process, receive, or otherwise manipulate streams of audio in near-real-time with minimal latency.
It may be thought of as Apple's architectural equivalent to another popular plug-in format, Steinberg's Virtual Studio Technology (VST).
Because of the many similarities between Audio Units and VST, several commercial and free wrapping technologies are available (e.g. Symbiosis and FXpansion VST-AU Adapter).
[1] Audio Units allows sound file audio time stretching and pitch scaling (e.g., timestretch), sample rate conversion, and streaming over a local area network.
It also comes with a set of AU plug-ins such as EQ filters, dynamic processors, delay, reverb, and a Soundbank Synthesizer Instrument.