Quickly running Select * from Users where Id=##UserID## in the Data Explorer, entering my userid, and cross-checking with my email, I can confirm that it's an md5 of the entire address (according to @Arjan, it converts to lowercase first).
Note that the main SE database does not hash emails (they're visible on a user's own profile and to mods)--they're just hashed in the dump for privacy. Why they're included in the dump is beyond me (maybe for cases like these?).
The hash is used to auto-generate your gravatar:
http://www.gravatar.com/avatar/<hash>?s=32&d=identicon&r=PG
Users who have not actually provided an email address will still have an "email hash", because one is neccessary to generate distinct avatars. In these cases it is generated from a salted hash of their latest IP address.
