Long story made short... SEO stands for Search Engine Optimization. It is through promoting your website through the correct means and editing your website so that you will have a better position on Search Engine like Google, Yahoo, MSN and many other Search Engines that you can find for keywords. Another term that you may also come across is SERP, Search Engine Ranking Position. It means your position on the Search Engine for some of the words. I am not a SEO person so I will leave the explaining on how to do it to a better person.
seomoz.com and seobook.com is the right place for this SEO is basically in simple words to optimize your site or any site for the searched keywords to get targetted traffic from the search engines from the searchers on the net to your site .. It increases traffic as main search engines plays a main role in bringing traffic for the site owners and to get the best resource to the users to get them the best site order wise and they are ranked mainly through backlinks and many other determinants which u can read in that links and DP forums old post will help u..
check the google adwords keyword suggestion tool for your service/product and make sure your page titles and metadata match up - and of course get some relevant unique content!
SEO Sadly thought to be what solves a business lack of targeted traffic. Confused by many to mean, increased sales due to increased rankings. Free and / or reduced cost / long term R.O.I. advertising when done properly, however being done properly is a rarity. Something a lot of people claim they can do, and which in reality, very few can do. Just one form of online advertising, which can drive traffic to your website. Peace!
SEO is a game between search engines and search engine marketers. The search engines want to get their users the best sites that match the search terms, the marketers want to be in those spots. SEO is not something you can learn now and use the next year, as the rules of the game seem to change extremely fast, it is something that requires your full attention and lots and lots of trials in order to succeed.
there are some free resources if you search on SEO. You can probably find some free Ebooks that can help with the understanding. A lot of the free sites actually want to sell something