I am trying understand an algorithm used to determine orientations. Knowing a cross product of 2 vectors gives you a third vector which is orthogonal. What does the multiplication of a 3x1 and 1x3 matrix/vector represent? This should form a 3x3 matrix.
example equation 4.66 in the following context
(Vkb and Vki are vectors)
Yes, you're right with that. Note that for matrix multiplication you always have
$\underbrace{A}_{\in\mathbb{K}^{m\times n}} \cdot \underbrace{B}_{\in\mathbb{K}^{n\times k}} = C\in\mathbb{K}^{m\times k}$.
Your vector-vector multiplication (the vector is in $\mathbb{K}^{3\times 1}$) in the form $vv^T$ where $v=\begin{bmatrix}v_1\\v_2\\v_3\end{bmatrix}$ gives you indeed a matrix:
$\begin{bmatrix}v_1\\v_2\\v_3\end{bmatrix}\cdot\begin{bmatrix}v_1&v_2&v_3\end{bmatrix} = \begin{bmatrix}v_1v_1&v_1v_2&v_1v_3\\v_2v_1&v_2v_2&v_2v_3\\v_3v_1&v_3v_1&v_3v_3\end{bmatrix}$
EDIT: You were asking for a meaning of this, but I've never heard that this construction has a special meaning.