SLAM comes from the robotics area and describes the techniques to create a map from an unknown environment. With the knowledge gathered by generating a map it is possible to determine a location and also to navigate within a certain environment. SLAM by itself is not necessarily a specific algorithm but rather an approach on how to solve such problems. Because it is mainly used in the robotics area, you find many implementations which require special hardware such has laser depth sensors.
Links:
- "SLAM for Dummies" (PDF file) seems to be good way to easily get in touch with this topic
- openslam.org lists different implementations of SLAM
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