Reverse DNS (rDNS) turns an IP address into a hostname -- for example, it might turn 1.2.3.4 into host.mydomain.com. The PTR record is a DNS server record entry that allows rDNS. The PTR record is the answer to a Reverse DNS (rDNS) query. In the familiar forward DNS query, the A record is the answer.
Some will tell you:
Forward: hostname is mapped to your IP address, e.g., host.mydomain.com ---> 1.2.3.4
Reverse: IP address is mapped to your hostname, e.g., 1.2.3.1 --> host.mydomain.com
However, this is not usually the case -- especially in the web hosting world. In reality, forward DNS for "host.mydomain.com" pointing to IP address "1.2.3.4", does not necessarily mean that rDNS for IP "1.2.3.4" also points to "host.mydomain.com." A special PTR-record type is used to store reverse DNS entries. The name of the PTR-record is the IP address with the segments reversed + ".in-addr.arpa". For example the reverse DNS entry for IP 1.2.3.4 would be stored as a PTR-record for "4.3.2.1.in-addr.arpa".
To make things more confusing, the PTR record is not stored on the same DNS server as the A record. For example, you will see the A record for your domain in cPanel DNS. However, you would not put a PTR record there. The PTR will be entered on the IP address owner's DNS server. This may not even be your web host -- its usually the upstream provider or ISP that owns the IP address. If you need to set up a PTR record for your domain you will need to submit a ticket to your host.
In the web hosting world, there is only one reason to have a PTR record. Many e-mail servers on the Internet are configured to reject incoming e-mails from any IP address which does not have reverse DNS. So if you send mail to another mail server a reverse DNS must exist for the IP address that your outgoing e-mail is sent from. It does not matter what the reverse DNS record for your IP address points to as long as it is there (e-mail servers checking for reverse DNS do recognize that it is normal to host many domains on a single IP address and it would be impossible to list all those domains in reverse DNS for the IP).