It's appearance signals the imminent freezing of one or more programs. Typically thwarted by force-quitting the program, or in more severe cases, shutting down the computer.
The Mac OS pointer icon of a colorful spinning wheelindicating the program currently under the mouse pointer is no longer responding. Called the beachball of death if the program never recovers or causes the operating system to become so busy (usually due to insufficient memory) that nothing else responds.