A hybrid is a character or other object that is balanced in their capabilities, rather than specialized.
This term is usually used to refer to classes that are multi-faceted, like Druid, Paladin, and Shaman. It has been said that in the World of Warcraft, all classes are hybrids to a certain extent. Blizzard has even dubbed the Warrior a tank/DPS hybrid.
The term "hybrid" can also refer to the choices a player makes with their character, such as in their talent spec. While most players will spend a majority of their points into one talent tree, such as (41/20/0), some players will prefer to remain balanced and pick up key low-tier talents from all three trees. Players are generally considered hybrid if they do not spend at least 32 points into any one tree.