A named pipe (often referred to as a FIFO) is an old Unix IPC mechanism for processes communicating on the same machine. It works just like a regular, connected anonymous pipes, except that the processes rendezvous using a filename and don't have to be related.
To create a named pipe, use the Unix command mknod(1) or on some systems, mkfifo(1). These may not be in your normal path.
A fifo is convenient when you want to connect a process to an unrelated one. When you open a fifo, the program will block until there's something on the other end.
For example, let's say you'd like to have your .signature file be a named pipe that has a Perl program on the other end. Now every time any program (like a mailer, newsreader, finger program, etc.) tries to read from that file, the reading program will block and your program will supply the the new signature. We'll use the pipe-checking file test -p to find out whether anyone (or anything) has accidentally removed our fifo.