Vitae (Latin for Life) is the essence that conserves the undead.
In its most basic sense, vitae is a term vampires use to refer to blood. More specifically, it is the source of a vampire's unlife and powers. The "blood" in a vampire's body is more than the admixture of plasma, platelets, hormones, etc., which courses through the veins of mortals. When blood enters a vampire's body it is mystically transformed into vitae, giving it the power to form blood bonds, create childer, and infusing it with a power that is attractive to some other supernaturals. Blood that contains vitae is slightly darker, and has an almost syrupy quality. It has all the normal metallic smells blood should, but also has a subtle, sweet smell, like a dessert wine. 
Furthermore, vitae is almost always more "condensed", meaning that while vampires have the same amount of blood in their systems, they possess more points of vitae. The maximum amount of vitae in a vampire's body is determined by their Blood Potency.
Other vampiric creatures can gain Vitae from other sources than blood. The Cihuateteo feed on breath (a skill that is also able to be learned by the Kindred), the Formosae feed on misery and self-hate, the Mnemovores feed on memories and Ghûls feed on raw flesh, but all transubstinate the essence of it into a substance called Vitae. The Strix are said to originate in a realm completly devoid of any trace of vitae, and are envious of it.