Raksha Bandhan (the bond of protection in Hindi) or Rakhi (राखी in Devanāgarī) is a Hindu festival which celebrates the relationship between brothers and sisters. It is celebrated on the full moon of the month of Shraavana and in 2006 it falls on August 9.

The festival is marked by the tying of a rakhi, or holy thread by the sister on the wrist of her brother. The brother in return offers a gift to his sister and vows to look after her. The brother and sister traditionally feed each other sweets.

It is not necessary that the rakhi can be given only to a brother by birth; any male can be "adopted" as a brother by tying a rakhi on the person, whether they are cousins or a good friend. Indian history is replete with women asking for protection, through rakhi, from men who were neither their brothers, nor Hindus themselves. Rani Karnavati of Chittor sent a rakhi to the Mughal Emperor Humayun when she was threatened by Bahadur Shah of Mewar. Humayun abandoned an ongoing military campaign to ride to her rescue.

The rakhi may also be tied on other special occasions to show solidarity and kinship (not necessarily only among brothers and sisters), as was done during the Indian independence movement.

The origin of the festival is mostly attributed to one of following mythological incidents:

1. Indra's fight with Vritra - Indra, the king of devtas (gods), had lost his kingdom to the asura (demon) Vritra. At the behest of his Guru Brihaspati, Indra's wife Sachi tied a thread around her husband's wrist to ensure his victory in the upcoming duel.

2. Draupadi and Krishna during the Rajsuya yagya - After Shishupal's death, Krishna was left with a bleeding finger. Draupadi, the wife of the Pandavas, had torn a strip of silk off her sari and tied it around Krishna's wrist to staunch the flow of blood. Touched by her concern, Krishna had declared himself bound to her by her love. He further promised to repay the debt manifold, and spent the next 25 years of his life doing just that. For all that Draupadi was the daughter of a powerful monarch, sister to a legendary warrior, and wife to five warrior princes, Krishna remained the only man she could ever truly depend on.

I constantly steal from wikipedia. As should you, it's what Web 2.0 is all about :)