FTHR (or Functional Threshold Heart Rate) is the heart rate you can sustain for a one hour race effort. If you have a heart rate graph from a one hour race, your HR average over the race is your FTHR.
To test in training, we use a 30 minute all out effort on the run or turbo. Press the lap button on your HRM after 10 mins, and your FTHR is the average heart rate for the last 20 minutes of the test.
You can then use the results of this test to accurately determine your training zones.
It's worth noting that most people can 'feel' Functional Threshold quite accurately, even without a heart rate monitor. It's that feeling of 'if I go a little bit harder, I'm going to have to stop exercising a whole lot sooner.'
However, in a race situation, when we're excited and our body is full of adrenaline, it's often hard to 'feel' things accurately. Similarly, in training, on your own especially, a heart rate monitor can be a useful tool to let you know that you should be working a bit harder in order to get the training effect you're after!