Usability Testing is a term used to describe the methodology employed to evaluate a website, or screen-based product, with its intended users. The testing measures how ‘usable' or ‘intuitive' a product is and how easy it is to reach their goals.
The key difference between usability testing and traditional testing (bug testing, break testing etc.) is that usability testing takes place with actual users or customers of the product. Whilst traditional testing might be undertaken by a developer, designer or project manager, usability testing removes any bias by collecting feedback direct from the end user.
There are a few types of usability testing:

Comparative Usability Testing
A comparative usability test is used to compare the usability of one product with another. It can be used at a high level where a new product is tested against competitor products, or at a low level, where two web page designs are tested to establish which provides the best user experience.
Explorative Usability Testing
Before a new product is released, explorative usability testing is undertaken to establish what content and functionality that a new product should include to improve beyond its competitors. Members of the target audience are recruited to test current products, and similar products. They are given realistic scenarios to highlight any gaps in the market that can be taken advantage of and illustrate where to focus design effort. Explorative usability testing normally takes place as part of a User Requirements Capture exercise.
Evaluation Usability Testing
This is a test of a new or updated product either during the production lifecycle, or prior to its launch. This usability test introduces users to the new design to ensure it is intuitive to use and provides a positive user experience. The aim of the evaluation usability test is to ensure any potential issues are highlighted and fixed before the product is launched.
Advantages

Throughout the project life cycle there are many advantages of usability testing including: feedback direct from the target audience to focus the project team; internal indecisions can be resolved by testing users with a problem to see how they react to the different options; and issues and potential problems are highlighted before the product is launched. However, the business advantages of usability testing can be seen at the end of the project; it increases the likelihood of usage and repeat usage, it minimises the risk of the product failing, and users are better able to reach their goals, which results in the business meeting its targets.
Disadvantages
Usability testing provides many benefits, but there are a few disadvantages in using this methodology, which should be noted. Firstly, testing is not 100% representative of the real life scenario, e.g. a mother will not have her two young children running around like she might have at home. Also, usability testing is deeply qualitative, so does not provide the large samples of feedback that a questionnaire might, but the feedback can be far more accurate and insightful.
Conclusion
Usability Testing can be used in a variety of ways during your project lifecycle. Despite not being able to mimic real life usage, usability testing is still the best method of ensuring your product or website supports users in achieving their goals quickly and easily. When businesses meet the needs and expectations of their users, they are more likely to develop a successful product.