Nagware is a software distribution model where a program is advertised as free, and has all its features available (unlike crippleware), but the user will be asked to give the developers money. This can be done in very unobtrusive ways, like by merely adding a donate or purchase button to a menu or dialog, by more obtrusive ways, like popping a dialog asking for money when the user launches the program, or in extremely obtrusive ways, like popping dialogs at regular intervals, often requiring a delay before you can close them. Nagware is similar to adware, only, the advertisement is for the program itself.
Like with crippleware, the ethical problem I have with nagware is when it is advertised as free, but is still monetized. I still use a fair amount of nagware with unobtrusive nagging, like those with donate buttons, but, as the nags become more obnoxious, I actively seek out replacements. For example, early versions of WinZip had annoying nag messages every time you opened it, which eventually led me to switch to the totally free 7-Zip.