It's officially called "the hood", but I've come to think of it as the cone of stupidity — as in "lower the cone of stupidity!" — because of the effect it seems to have on my IQ every time I put it on (and if "lower the cone of stupidity!" doesn't ring a bell, check out this). You typically wear the Cone Of Stupidity during practice instrument work, and its main effect is supposed to be to block out any external visual clues (like the horizon) to simulate flying in zero visibility. All you can see with it on is the instrument panel, more or less. But its real effect — on me at least — seems to be to block the capacity for sustained thinking, and to lower my IQ to about the OAT in Celsius. Things that are simply obvious under normal VMC flying conditions — the mental arithmetic needed to work out a course interception, or what side of the plane an NDB is on, for example — start feeling like mammoth feats of intellectual effort under the hood.
The first few times you do it, it's amazing how much mental effort is needed to keep a plane flying straight and level on instruments alone; everything else suffers. Later, it starts being subconscious and "easy" (or it had better start getting easy...), but right now it's overwhelming.