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A momentary switch is one that acts much like any other switch--it starts or stops current, but only a single position connects with live current. Once the switch is thrown or the button is pushed, it snaps back to the original position. If you throw the switch by pushing it to the "up" position, it makes contact and snaps back to the lower position instead of remaining up.
Momentary switches can be used to turn on a circuit, turn one off, or activate momentarily. A good example of the momentary function is in the standard doorbell. When the switch is pushed on, it rings the bell until the switch returns to the original position. You wouldn't want the doorbell to ring constantly once the switch is activated, as it's only meant to work long enough to get your attention. The momentary switches found in average doorbells ring for as long as there is current, but some switches activate the doorbell for a specified length of time before the system "times out" and must be initiated again.