Translation:Yo quiero ese sombrero.
este = this... ese = that. Both are masculine... I always have a hard time with demonstratives. If I have to really think about it I just remember, "This and These have T's"
Ese is masculine singular. As an adjective, it can go before a m.s. noun (Quiero ese sombrero. I want that hat.) or it can stand for a m.s. noun as a pronoun (Quiero ese. I want that (or that one, referring to the hat.)
Eso is a neuter (or neutral) pronoun. It can't be used as an adjective before a noun. It can refer to and stand for something undefined, a situation, a circumstance (¡Eso es horrible! That is horrible!) or it can be used when you can't tell what an object's gender is (¿Qué es eso? What is that?).
I wanna give you a lingot, but i aint gonna. >:p
It is a fair point. One lingot to you!