It rewrites the forum URLs so that they are cleaner. For example:
http://www.daniweb.com/techtalkforum...read.php?t=123
is now written as
http://www.daniweb.com/techtalkforums/thread123.html
The advantage of this is much better spiderability by search engines, since it fools the search engines into thinking you have static HTML pages instead of dynamic PHP pages with query strings.