This scientific concept was popularized (as a part of Chaos Theory) during the 1980s. In its popular form it's usually quoted as "A butterfly flapping its wings in Brazil may cause a tornado in Texas". The concept was discovered by the scientist Edward N. Lorenz in 1963, during a computer simulation of weather. It was when he entered the almost-precise data from an earlier point in time than that which the calculations had already reached. After continuing to run the simulation for the same amount of time, the results turned out completely different: Proving that small changes don't have to stay small, but may grow exponentially.
(Ray Bradbury's story "A Sound of Thunder" predicted something like this as early as 1952, BTW. "Die dreifache Warnung" (1911) by Arthur Schnitzler was even quicker, though, as Max Sinister discovered. Interestingly, both use butterflies.)
In its strictest form, the butterfly effect will cause most people born after the PoD be very different. Even if the parents should still meet, the chance of the same sperm meeting the same egg is infinitesimally small.
In Alternate History, many authors like to use well-known historical characters in similar functions as in our world's history. Take Joseph Goebbels as an inquisitor in the service of the Vatican, or Richard Nixon as a used-car salesman - of steamcars to boot. This makes their stories easier to digest, and their characters easier to relate to.
When an OTL event (like the birth of a person) doesn't happen in an ATL because of a long cause-and-effect chain after the PoD, it is said to be "butterflied away". Most AHs avoid this, for the above reason. Such TLs are said to make use of "butterfly nets".
The movie "The Butterfly Effect" - you may call it "AH, but with its focus on the lives of a few persons" - was named after this concept. This film and others with a similar concept ("Run Lola Run", "Sliding Doors") show how quickly different similar TLs with initially tiny differences can diverge from each other.
Most TLs don't care about this concept, so it's easier to list those which do on this page.
Usage in "How many Sixes..."[]
"How many Sixes does Adolf Nazi have to Roll?" by Max Sinister is not supposed to be an easy story.
Also, it fits - if we use the butterfly effect - that the world we know is destroyed bit by bit as the years go by. (As if the Nazis hadn't done enough damage in the first place.) Hence, the only people who are the same as in our world are those conceived and born before the Point of Divergence. That is: 1940, roughly. If I decide to let people from our history appear who are born after this date, they'll be really more like siblings from the same parents (possible after all, esp. if these parents were already married/betrothed/an item before the PoD), with the same sex (the chance is about 50%), the same first name (possible, families like to reuse names, esp. traditional ones, and people's tastes tend to stay similar), and roughly the same birth date.
Furthermore, there's still the possibility of "morphic twins", as Terry Pratchett would have said: Different people who have the same function as certain people from our history. If there is no Steve Jobs, someone else will probably still invent the PC.