Soft money is donated to a political party or group instead of directly to a candidate. Soft money can be used for ads, bumper stickers, or anything else that doesn't tell you to vote for a specific person.
In politics, hard money goes directly to a candidate, with strict limits on how much is donated and how it's spent. Soft money is increasingly popular, since it's so loosely regulated. Theoretically, soft money is only used to get out the vote and build a political party, but in reality the line is blurry: an ad that tells you how terrible one candidate is, without directly telling you to vote for the other candidate, can be financed with soft money.