Usually translated as perverted, or sexually explicit. This word in Japanese usage is far more complex than that as it has other meanings such as metamorphosis, weird, an anomaly, or abnormal. But most of the time that you see or hear it in anime or in fan circles it refers to perverted.
English speakers will apply it as an adjective as in 'hentai manga' or 'hentai anime'. The Japanese do not do this, rather they will speak of ero-manga or ero-anime. The Japanese will use the term to refer to a person as in "he is hentai".
