It's very similar to an IF() construct in SQL:
SELECT IF(IF(true, 'true', 'false'), 't', 'f');
Basically, if the expression to the left of the "?" evaluates as true, then use the expression following the "?", else use the expression following the ":". The particular example you provided is a bit meaningless, since the inner ternary expression will always return the string 'true', which since it is a non-empty string which is not "0", will cause the 't' to be echoed.
A common usage is in same-page form/form-handlers, where you want to pre-fill the fields if the values have already been submitted, typically when there was a validation error:
<input type="text" name="sample" value="<?php
echo (isset($_POST['sample'])) ? htmlentities($_POST['sample'], ENT_QUOTES) : '';
?>" />