I am not sure you have specified all requirements, but here are three ways to tackle this. The first is based on a tabular enviornment and will not allow new paragrahps in the indented text. The second uses minipage and the indented text may now be broken into paragraphs. The third is a suggestion of @egreg to use the enumitem package and a description list; this will break over pages, but does not generalise to further tabstops if you need them.
First the first two solutions:

\documentclass{article}
\newcommand*{\tabulardef}[3]{\begin{tabular}[t]{@{}lp{\dimexpr\linewidth-#1}@{}}
#2
\end{tabular}}
\newlength{\standardparindent}
\setlength{\standardparindent}{\parindent}
\newenvironment{minipdef}[2]{\makebox[#1]{#2\ \hfill}%
\begin{minipage}[t]{\dimexpr\linewidth-#1}%
\setlength{\parindent}{\standardparindent}\noindent\ignorespaces}%
{\end{minipage}}
\begin{document}
\subsection*{Tabular example}
Some list:
\begin{itemize}
\item Some text which is long and wraps on to the next line as usual
as this is demonstrating
\item \tabulardef{2cm}{Definition}{Some long text which should both
automatically wrap to a new line and be tabbed as displayed here.}
\item Some sublist
\begin{itemize}
\item with the new counter and some text which is long and wraps on
to the next line as usual as this is demonstrating
\item \tabulardef{2cm}{Definition}{Some long text which should both
automatically wrap to a new line and be tabbed as displayed here.}
\end{itemize}
\end{itemize}
\subsection*{Minipage example}
Some list:
\begin{itemize}
\item Some text which is long and wraps on to the next line as usual
as this is demonstrating
\item \begin{minipdef}{2cm}{Definition}
Some long text which should both automatically wrap to
a new line and be tabbed as displayed here.
This also contains new paragraphs with long text for demonstration
purposes.
\end{minipdef}
\item Some sublist
\begin{itemize}
\item with the new counter and some text which is long and wraps on
to the next line as usual as this is demonstrating.
\item \begin{minipdef}{2cm}{Definition}
Some long text which should both automatically wrap to
a new line and be tabbed as displayed here.
This also contains new paragraphs with long text for demonstration
purposes.
\end{minipdef}
\end{itemize}
\end{itemize}
\end{document}
In the tabular case, there is a first column that is left aligned to contain the heading, and the subsequent text is in a p column. Extra spacing before the first and after the last columns has been removed with @{} specifications.
The minipage case, sets the heading in a box first and then starts a minipage. I have set things up so that subsequent paragraphs have the standard paragraph indent of the main text; without some indents it is hard to see where they begin.
Now the third solution with enumitem:

\documentclass{article}
\usepackage{enumitem}
\newlist{deflist}{description}{2}
\setlist[deflist]{labelwidth=2cm,leftmargin=!,font=\normalfont}
\begin{document}
Some list:
\begin{itemize}
\item Some text which is long and wraps on to the next line as usual
as this is demonstrating
\item
\begin{deflist}
\item[Definition]Some long text which should both automatically wrap
to a new line and be tabbed as displayed here.
\end{deflist}
\item Some sublist
\begin{itemize}
\item with the new counter and some text which is long and wraps on
to the next line as usual as this is demonstrating
\item
\begin{deflist}
\item[Definition]Some long text which should both automatically
wrap to a new line and be tabbed as displayed here.
This also contains new paragraphs with long text for
demonstration purposes.
\end{deflist}
\end{itemize}
\end{itemize}
\end{document}
itemizeenvironment, i.e. with automatic line wrapping, some inline math, etc. Does that answer your question? – Bernd Jun 27 '13 at 16:32