Packet Tracer is an application produced by Cisco Systems to provide a virtual simulation of real life equipment and situations. 

Packet Tracer is used heavily in the Cisco Net Academy (Program used to teach Cisco curriculum through third-party schools and training organizations).  While Packet Tracer is commonly used in the education environment, many corporations use the tool, to map out and plan network layout, and base device configuration.

 With Packet Tracer you have the ability to simulate a network, and well as traffic, end devices and servers.  You can configure routers, switches, wireless access points, servers, and end devices.  (This includes mock versions of the Cisco IOSs)