Cats do many things that seem affectionate but aren't, like rubbing up against your legs (they're just putting their scent on you; it's a marking-the-territory kind of thing, and no affection should be inferred).

But the head-butting thing is one of the few unambiguously affectionate things they do. A cat likes you, muchly, if it butts you with its head.

When I feed my cats, I scoop Cat Chow out of the bag with a measuring cup and then pour it into my cats' bowls.

Often Jack (seen above) is waiting for the food, and is so happy about getting fed that he head-butts my hand coming down, causing me to dump all the food onto the floor.

Drives me crazy, but whattaya gonna do?