What is cosplay? It literally means Costume + Play. It usually indicates dressing up as an anime or manga character, but there can be different kinds of cosplay. Here you can see a rather silly example of my own cosplay, me dressed as Sailor Mercury from the Sailor Moon series... In this case, people use the term CROSSPLAY, i.e. cross-dressing plus crossplay! I think it's a lot of fun. Many people go to comic conventions and stuff dressed as their favourite characters, and it must be great, I've never done that though. You could say I'm a closet crossplayer!
On my links page you can find some good cosplay sites if you're interested.