Like Tim stated it is an area of skin that becomes irritated and infected, usually caused by excessive moisture (bathing, swimming, humidity). The longer haired/thicker coat type of breeds or those with allergies & the like are more susceptible but it can occur in any breed of dog.

The main factor in preventing hot spots is making sure they are completely dried after swimming, bathing, etc... And make sure they are well groomed.

As far as healing hot spots go, it is wise to clean & dry the area WELL. Air helps IMMENSLEY with the healing proccess, therefore the area is often times shaved.

Sometimes if caught very early you are sometimes able to heal a hot spot at home by shaving the area well, then cleansing it with a mild shampoo and be sure to dry it WELL. You can then apply something like gold bond powder to the area to help dry it up. If your dog is scratching/licking at the area excessivly you can apply some cortisone cream (make sure to apply it at differnt times than the powder though and make sure your dog can not lick it off). If the area is large, fairly smelly, etc... it is often times too late to cure it by those means alone and antibiotics from a vet are usually needed.

The most common areas that are affected are the flanks, rump, legs and feet but they can occur anywhere.