Wikipedia: Hidden Markov Model; is a statistical Markov model in which the system being modeled is assumed to be a Markov process with unobserved (hidden) states. An HMM can be presented as the simplest dynamic Bayesian network.
Hidden Markov Model: Kurzweil, How to Create a Mind "A Strategy for Creating a Mind Kurzweil summarizes how he would put together a digital mind. He would start with a pattern recognizer and arrange for a hierarchy to self-organize using a hierarchical hidden Markov model. All parameters of the system would be optimized using genetic algorithms. "