A checksum (of which MD5 sums are one type) is a string of characters produced by an algorithm acting on a file.
The checksum is used to validate data integrity, as the algorithm will produce a different checksum if any changes occur to the file in question, making it easy to detect errors that may have been introduced during the file's transmission or storage (e.g. due to physical damage, bit rot, malicious intent, or accidental non-write-protected usage). The sum thus acts as an identifier for the file in its exact current state. You can calculate the sum at a point when you know your file (e.g. a disk image) isn't corrupted or altered from how you think it should be, and calculate the sum again at later points in time, comparing the newly calculated sum to the original sum to check that the disk has not been corrupted or altered. See this page for more on how checksums work.
Figure 3: Choose to either save or display the MD5 sum output.