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What is a HD theme?

HD in android is high density (most commonly).

With android there are different display densities, determined by each device's screen size. Low density, high density, and medium. Low density is used rarely. Most new devices are medium or high. HVGA devices like the Hero/Eris, Moment, etc. have medium density (320x480), and higher end phones like the Droid/Nexus/Droid Incredible, etc. have high density (480x800+).

Running apps designed for medium density on a hd device results in a lower quality, more pixelated image. Also, the system has to scale the images, using more memory. Which of course is true for med density phones needing to scale down hd graphics. So if an app is available in both densities, choose the right one for best results in images and performance. Some apps are designed for both/all densities, including graphics for either and your device will use the right set because it knows if it is high/med/low. (Its a smart phone) ;)
 
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