The Conservatives have offered the Lib Dems a referendum on changing the voting system from the existing "first past the post" system to the alternative vote system (AV).
Under AV, voters rank candidates in a constituency. If no-one gets 50% of votes the candidate finishing last gets eliminated and their second preferences are awarded to the remaining candidates. This continues until one candidates passes the 50% mark.
If this promise is actually meaningful, it is should be approved by the Lib Dems. The Lib Dems would have probably preferred a straight fully proportional Parliament, but AV will be an easier sell and is an improvement over the current situation (both in the sense of being more fair and being easier on minor parties).
Jay