The "Hot" in "Hotlanta" refers to the many wonderful things to do in Atlanta, especially the sexy nightlife Atlanta is famous for. To a lesser degree, it also refers to the hot summer temperatures common to Atlanta.
While in the past, the term "Hotlanta" was used primarily by those visiting Atlanta, with over 340,000 Google entries, "Hotlanta" is now commonly used by most Atlantans and has become synonymous with "Atlanta".
Rhett Butler: Frankly my dear, get out tha way bitch, get out tha way
Nobody that actually lives in Atlanta says this. Ever.
Idiot: Dam fool! You live in Hotlanta?!
JohnO: Please go die. Right away.
ATL Person: Yeah, 'cause people not from here's what made it up. *lays the smack down* Repin' the ATL, fool, wat!