Sometimes when troubleshooting issues, the exact cause of the issue may be difficult to find. You may run across an error appearing in the log file. But it may not have enough information about what went wrong...or how it might happen again. So you can turn on tracing and watch the output, but if you don't know when the error may happen, you may have to sift through a lot of trace logs to find the spot of the error. That's where Event Trap tracing comes it.
Event Trap tracing allows you to specify keywords for content server to look for as it's writing out tracing in the server output. If that keyword is found, all of the tracing in the buffer at that time will be sent to a separate event tracing output file. So now you have a nice slice of tracing activity at the exact moment the particular keyword (based off error message or such) is hit. In addition, a thread dump from the JVM can be obtained at the same time to capture all of the thread activity as well. By default, the keyword is Exception so that every exception is captured this way.
By default, the log files can be found in the <content server instance directory>/data/trace/event directory or they can be viewed in the browser by clicking on the 'View Event Output' link.