Many cities, including Portland, are built on top of what used to be surface streams that flowed freely to the rivers. The streams were filled in or piped underground to allow development. Daylighting is when streams that have been piped underground in the past are restored to a more natural condition. This helps improve water quality, habitat, and can keep water out of sewage treatment plants.
Check out this post about the project to daylight Spring Garden Stream in southwest Portland. Another good local example is the daylighting of the headwaters of Tryon Creek.
Interested in more information? A good resource is this recent American Rivers' report on daylighting streams.