The ampersand symbol & means and, though it often implies a closer relationship than the word. So “cheese & onion and chilli” refers to two kinds of flavour: (1) cheese and onion; (2) chilli. Similarly, screenwriting credits use & to indicate a writing team and and to indicate separate contributions.
According to Adobe‘s short history of the symbol, the ampersand has been in use for almost two millennia. It was popular enough to be appended to alphabets as early as the 11th century (see 3.1.1 here).
Schoolchildren later learned it by rote as an extra letter, of sorts; in the 19th century they recited “A per se A” and “I per se I” to distinguish the words A and I from the letters A and I, and concluded their alphabets with “& per se and”, which means “(the character) ‘&’ by itself (meaning) ‘and’”. Ampersand, the name by which we know & today, is a corrupt abridgement of the phrase, and first appeared in dictionaries in 1837.
The ampersand is typically used to save time and space. Formally it is commonly used in references, business names, dictionaries, television and film titles, and when addressing a couple (“Dear Mary & Michael”), but as a direct substitute for and it is otherwise generally avoided in formal prose. &c and &cetera were once used frequently for etc., but these forms are now rare and can be considered old-fashioned. H. W. Fowler used & in early editions of the pocket and concise Oxford dictionaries and throughout A Dictionary of Modern English Usage:
“inversion is archaic & poetic under such circumstances, & non-inversion normal”
The ampersand was adopted as shorthand for and in formal logic, and it gave its name to a pretty curve in mathematics (see figure). It is now frequently used in computer programming, e.g. in HTML, though its very versatility has caused problems. It is even more popular in informal contexts, such as notes, diaries, letters, text messages, instant messaging, and online social networks.
Here is an interesting example of its time-saving deployment in an old informal note:
“Some of the outer slips have got torn, &’ll need mending” (Philologist Frederick Furnivall in a note to James Murray, editor of the first Oxford English Dictionary, from Caught in the Web of Words, K. M. Elisabeth Murray’s biography of her grandfather.)
[Edit: And a beautiful ampersand which Sarah France arranged with bark chippings. If browsing ampersands appeals to you, there’s a Flickr pool and a blog devoted to them. Readers might also be interested in my post on the use of the Tironian et (⁊) in Ireland.]