Promotional products are anything that gets your name / business name out to people. I have seen anything from branded key chains to windshield ice scrapers, to coffee mugs to credit card protects to pens to shirts & ball caps used.
Most often they are given away for free either as a goody at a trade show or in some short of raffle (donate a branded coffee mug to a charity raffle - for example). Or just have them for free at your front desk. We print signs and vinyl decals so on the scrap vinyl we have been printing American flags sticks with our logo and contact info bellow the flag. We keep the for free up at the cash registers for people to take.
The idea is to get as many people to see your name and what you do to get additional business.