A cooler is a hand lost not because of a mistake but rather because of the way the cards came out; a player with a strong hand loses to another player with a stronger hand. The losing player usually loses a lot of money and there is no way to avoid it with correct play.
An example of a cooler is when two players in Texas Hold'em both have a high pair and each hit their three of a kind on the flop. It's not a bad beat, just bad luck that the cards were such that correct play on the part of both players leads to one losing terribly. Both players had very strong hands.
Bad Beat, Cold Deck