Ambushes are a gameplay element in Empire: Total War. They are the result of keeping an army (in which every unit has paths seldom trod - or a general with the "cunning general" trait) stationary in a wooded area of the campaign map for 1 turn (The turn used to move them into position will not count as being stationary however). Rather than setting up fortifications, they will become hidden. When an enemy walks through their zone of control they can ambush them rather than intercept.
This means that on the battle map the ambushed army will be placed in the middle of the map, and will be unable to position their units before battle, starting in the formation they travel in (all units one behind the other) - whilst the ambushing army will be have a wide deployment zone surrounding them, generally on higher ground. This gives a major tactical advantage at the beginning of a battle, but only if the attackers act fast, before the enemy army can form up properly.
This tactic works best when placed alongside a road, so that small reinforcing armies can be dealt with, slowing the rate a nation can build up a large army. Placing them too close the road however will cause them to be spotted if an ambush chance is denied (for example if you have just a single group of horsemen attempting to ambush the enemy's main army).
Seeing as the units essentially become invisible on the campaign map, they can also be used for spying, though any agent will beat them in this regard, and setting up an ambush position close enough to an enemy city to be effective will leave the force vulnerable to attack whilst they set up.