SEO stands for search engine optimization. You are required to optimize the site first for search Engines and then for actual visitors. The search engines view the sites in a different way than a human visitor. Just search in google you can find excellent stuff on SEO
google uses his algorithm with more than 500 factors to rank sites when people searche for something. So, SEO people try to combine that factors to make websites more google friendly. Let's say, if google prefer green colored websites, than SEO specialist will give you an advice to change your website into green color SEO can be separated on 3 basic steps: 1. Research and Analytics 2. On-Site SEO 3. Off-Site SEO or Link Building Research and analytics will try to find the best SE sources, what people like to type in google when searching for something and other stuff. Also, you must analyze your competition in order to prepare good strategy. Targeting wrong keywords or keywords that you can't make top10 will lead to one unsuccessful seo campaign. On-Site is includes all that can be done on your site directly. So, content, structure, linking, other website elements Off-Site SEO or link building is just trying to make as many links as you can to point to your website. And also, the better quality links. What you should know is to forget about SEO and try to make a great website and everybody will link you. Let's say, hide somewhere in the bushes and take a picture of Pamela Anderson nude. Post it on your blog and you will get thousands of links
Correct me if I am wrong but I don't think it is somewhere more than 500 factors. The last time I learn about it is that google only has about 200+ factors to rank sites. Anyways, Search Engine Optimization is a process that is well strategized to rank web pages on certain related and competitive keywords/search queries to achieve greater ROI. Link building is one of its main and exhaustive activities that, if done correctly, contributes greatly to the overall ranking.
SEO means Search Engine Optimization. People do SEO for ranking websites among top search engines like google, yahoo and msn.