The definition of honor varies widely between cultures, as does the importance (or lack thereof) placed upon it. Honor is normally synonymous with dignity and refers to the upholding of one's values. The Klingons are notorious for the emphasis they place on honor.
This may be a more abstract way of viewing honor. But, as notions of honor are often very subjective, putting emphasis on clear objects (i.e. victory) makes the Klingon able to deduce the honorable conduct (i.e. meanings used to achieve victory).
Honor is one of the most important components of Klingon philosophy. However, it is significantly different from most other cultures' definition of the word. For example, Worf once said that "Nothing is more honorable than victory". From that point of view, stabbing an adversary in the back or using a cloaked ship could be seen as honorable if this is a way of achieving victory. (DS9: "Rules of Engagement")
The notion of honor seems to be highly relative and open to debate. Each and every Klingon could possibly have his own interpretation of what consists an honorable mean to achieve an end. Even more, some decisions are parodoxal because two different view of honor are in contradiction. For instance, in the DS9 episode Tacking Into the Wind Lt. Cmd Worf indicates that it is necessary to challenge Gowron's leadership (for he's presumably acting in a dishonorable way) while Gen. Martok is convinced that it is dishonorable to challenge the leader of the Empire in the middle of a war.
Hence, dishonor is sometimes a concept which compels Klingons to action.
Also, another important composant of Klingon honor seems to be simplicity. For example, it is seen as more honorable to destroy a ship than to conquer a planet, to kill an adversary with a bat'leth than with a disruptor, etc.
In that sense, it is also more honorable to be defeated in hand to hand combat than beeing discovered plotting with the Romulans.
It is to be noted, however, that achieving victory by economics means (as done by Quark in The House of Quark) is still seen as honorable, yet some Klingons are reluctant to such actions.
This is not addressing the differance between 'Honor' and 'honorable', Honor is a code of conduct of an individual klingon, and honorable is the action that can be taken to achieve the honor that accures to the individual; so each action and achievement is based upon the individual.