I know its used in the M1 tank, but what exactly is it?

Chobham armour is highly secret armour developed by the British army at what used to be the Royal Armament Developement & Research establishment (RARDE) near Chobham (Surrey,England),hence the name.If any british vehicle equipped with Chobham armour is damaged the damage has to be covered to prevent the composition falling into the wrong hands.
During Desert Storm a Warrior MCV was hit by an AP round accidentally fired by a Challenger,the Chobham armour soaked up the impact and the hull of the Warrior was only dented so it's highly effective.
Details of Chobham armour were passed on to the US army so it could be used by them.
HTH
Pete

Have a look:

http://en.wikipedia.org/wiki/Chobham_armour