A graduated ND filter, or graduated neutral density filter, is a special type of ND filter. While ND filters consist of a single disk of darkened glass, a graduated ND filter has a gradient on this glass going from dark to light.
The strength of the graduated filter is typically measured by the equivalent number of f-stops that the filter will darken the darkest part of the gradient by. Typically, each stop equates about .3ND, though it varies by the filter manufacturer.
There's a lot of combinations possible here, as you might imagine, so think carefully on your needs. Most photographers tend to prefer a graduated ND filter that darkens by 2 or 3 stops for their first, but again, it depends on the photographer.
Gradients can either be “hard” or soft”, that is, with an abrupt transition between light and dark, or a very gradual one. These are useful for different sorts of photographs, and it might be a good idea to have one of each.
The phrase “neutral density” comes from the fact that the filter is absolutely gray, darkening all colors equally. This prevents the image from taking on any particular color cast. You can also use colored graduated filters, which are discussed at the end of the article.
Make sure that you purchase a graduated ND filter where you can adjust where the gradient is located relative to your lens. Without this ability, you'll find your ability to compose images rather stunted. These tend to be the ones that are attached to a rectangular lens attachment, as opposed to the circular ones.
The primary use of graduated ND filters is for shooting with both the sky and the landscape correctly metered: