For example, if you need to transfer a file to your friend's laptop, you might create an ad hoc network between your computer and his laptop to transfer the file. This may be done using an Ethernet crossover cable, or the computers' wireless cards to communicate with each other. If you need to share files with more than one computer, you could set up a mutli-hop ad hoc network, which can transfer data over multiple nodes.
Basically, an ad hoc network is a temporary network connection created for a specific purpose (such as transferring data from one computer to another). If the network is set up for a longer period of time, it is just a plain old local area network (LAN).