Culling is the distance in which you can see other players. It's my only gripe with the game.
I'm not quite sure I understand why it happens, I've seen them talk about keeping the game to where people with less than optimal computer systems can run it and others have conjectured it's an issue with the game engine and even others with how many players are being added to existing servers.
All I know is when I stand in Lion's Arch, I use to be able to stand on the bank steps and see people running up the ramp to the old lion statue.
Then the culling was increased and I could only see people run across the the small arch bridge over the canal on the way to the ramp before they blipped out of existence.
Then culling was increased again and I couldn't see people standing around the Mystic Forge. Yet again and I don't see people until I am practically standing on top of them.
Out in the world I often see spell effects going off in the distance so I know players are over there, just can't see them until I get closer. It's a big issue in WvW with the "invisible zerg", you don't see you are running into a massive amount of people until it's too late.
So I'm really excited that they are getting close to finding an answer for this - YaY!