A pulpotomy is when the inflamed pulp chamber, usually on a baby molar, is removed, the area is sterilized, and the chamber is sealed. It is sometimes called a baby tooth root canal, but it's not really a root canal and it can be done is some cases in permanent teeth. It is a very common procedure in children and has a reasonably good prognosis of success. It's also fairly easy to do in conjunction with associated procedures.
When a cavity gets really deep, close to the pulp of a tooth or even into the pulp, the pulpal tissue becomes irritated and inflamed. This is usually the "tooth ache" you feel. If the inflammation and infection continues without treatment, the tooth will likely eventually abscess. In baby molars, a pulpotomy is used in the process of trying to save and restore the tooth. First, the decay is removed, and then the pulp chamber (the top part, not the root canals) is removed usually with a high-speed bur or spoon excavator. A small cotton ball damp with formocresol is placed to "mummify" the pulp stumps and to sterilize the area. After a couple of minutes, the cotton ball is removed and the opening is sealed usually with a Zinc Oxide and Eugenol material like IRM. IRM is a putty like material that hardens up after a few minutes. After a pulpotomy on a baby molar, it is usually necessary to place a stainless steel crown to restore the tooth. The most common method to treat pulpotomized teeth is formocresol. Other methods include Ferric Oxide, MTA, electrosurgery and even lasers.
Pulpotomies have reasonably good prognosis. It may buy some time, but cannot save an already abscessed tooth. It is often surprising to me how a seemingly small area of decay can be deep enough to reach the pulp. This is often due to the varied antomy of baby teeth and the rapid progression of decay. Although a very reliable procedure, rarely, a tooth with a pulpotomy will have complications and need to be extracted. This is usually due to the remaining pulp tissue in the root canals giving some kind of trouble.
Bottom line: a pulpotomy is a really good and reliable way to save a badly decayed baby tooth.
More info on: Pulpotomy