The Maximum Transmission Unit (MTU) is a parameter that determines the largest datagram than can be transmitted by an IP interface (without it needing to be broken down into smaller units). The MTU should be larger than the largest datagram you wish to transmit unfragmented. Note: this only prevents fragmentation locally. Some other link in the path may have a smaller MTU: the datagram will be fragmented at that point. Typical values are 1500 bytes for an ethernet interface, or 576 bytes for a SLIP interface.
Modern operating systems use a technique called Path MTU discovery in order to try to figure what's the Path MTU of the peer.
See also Path MTU spoofing.