Data transfer (synonymously referred to as bandwidth) is the amount of data you can send.
Using the analogy of a highway, each car is a unit of data. You can only let X number of cars on your highway before the transit authority shuts you down.
Usually data transfer is stated in gigabytes. A typical image is usually under 0.0001 gigabytes in size. Data transfer is much more expensive than diskspace, and will likely be the limiting factor in the hosting plan you choose (if you reach it). You may be surprised how much data transfer you actually need, so it is prudent to ensure you have enough (and that the web host you choose makes it easy to upgrade to a better plan).