Acid etching is the practice of using an acidic liquid on the blade of a sword to try and enhance the differential heat treatment and make it more visible. For the purposes of disambiguation an acid etch of a different kind can be used to create a fake hamon on a blade but thats not what we're going to be talking about here. When an acid is used on the blade, surface corrosion occurs at differing rates depending on the hardness of the steel at that specific area. This creates a visual effect that can be used to accentuate the heat treatment. When done well, this can enhance what might otherwise be a very dull blade due to the heat treatment or polish not being good enough for it to show naturally.
Common etchants include ferric chloride, vinegar or even lemon juice and many people who practice this feel that different etchants work better on different steels. I've myself experienced this and feel that for example, lemon juice rather than vinegar works best on steels such as 1060. Of course, your mileage may vary and its best to approach anything like this carefully and not to do it on expensive blades.
If you're looking for information on how to do this click here but do yourself a favour and read the disclaimer.