As told in the gospel according to John, following the crucifixion, the resurrected Jesus appears in front of his disciples and greets them (John 20:19-21). The disciples then run off to tell the only disciple who was not present during Jesus' visit, Thomas, that they had witnessed the resurrected Jesus.
John 20:24-25 (NIV) Now Thomas (also known as Didymus), one of the Twelve, was not with the disciples when Jesus came. 25 So the other disciples told him, “We have seen the Lord!” But he said to them, “Unless I see the nail marks in his hands and put my finger where the nails were, and put my hand into his side, I will not believe.”
Since Thomas did not encounter the risen Jesus as the other apostles did, he decides to maintain skepticism regarding his resurrection. Speaking for myself I respect Thomas' approach. Just because he was not there with the other disciples does not mean Jesus had not actually revealed himself, but if he were to merely take their word for it then by that standard he would have to accept any word of mouth relating any miraculous claim that was supposedly witnessed by anyone ever.
So until Jesus reveals himself personally to Thomas he declares that he would remain unbelieving. Jesus then in John 20:26-27 reveals himself to Thomas and he comes to acknowledge his resurrection.
But then Jesus says the following: John 20:29 (NIV)Then Jesus told him, “Because you have seen me, you have believed; blessed are those who have not seen and yet have believed.”
Jesus in a way rebukes Thomas, telling him that he has believed because he had seen, but that if you have believed without seeing then you are blessed. What is deduced from this is that those who make the leap of faith are "better" or more appreciated than those who rely on concrete evidence and who are otherwise unconvinced.
Evidence should be the basis of anything purporting to be the truth. If Christianity is true then it should be substantiated by evidence in order that one might be convinced. A person who does not base his faith on evidence might as well have believed in anything other than Christianity, because his faith is arbitrary and not founded on anything. Therefore Thomas in his sincerity declares that he is unconvinced by the words related to him by other disciples and demands superior evidence.
So why is the person who is sincere in his pursuit of truth and who requests better evidence is lesser (according to Jesus) than that who had made the leap of faith?
EDIT: I have just been reading "The Case for Christ" by Lee Strobel, where the author interviews acclaimed New Testament scholar Dr.Craig Blomberg who shares my understanding of the verse at-hand, as page 76 of the book reads: "He [Blomberg] was quiet for a moment, then continued 'You know, it's ironic: The Bible considers it praiseworthy to have a faith that does not require evidence. Remember how Jesus replied to doubting Thomas: "You believe because you see; blessed are those who have not seen yet believe"'"