Shockwave is a 3rd party graphics/video player, currently from Adobe, installed as an add-on for browsers. Its main use is probably for the advertising content that litters web sites but it may also be used for the actual graphical content of the sites you visit. If you didn't install it yourself (from a pop-up on a Shockwave enhanced web page) then the OEM for your computer likely pre-installed it. Another possible source, especially for old (defunct) versions, is from game CDs. A lot of games installed Flash or Shockwave players to display video content (cut scenes, previews, advertising etc.). If your Shockwave version is a Macromedia product it is too old and that is probably why it frequently crashes.
Flash is another similar browser add-on. There isn't a stable working version of Shockwave or Flash for 64bit browsers so installing either will cause problems. If you are running 64bit Windows and you need to have these add-ons (ie. for YouTube etc.) then you can use the 32bit IE8 provided with Win7 instead of the default 64bit version IE8.