“Search engine optimization (SEO) is the process of improving the visibility of a website or a web page in search engines via the "natural," or un-paid ("organic" or "algorithmic"), search results. In general, the earlier (or higher ranked on the search results page), and more frequently a site appears in the search results list, the more visitors it will receive from the search engine's users.” (Wikipedia, retrieved 18:59, 5 March 2012 (CET))
See also:
Wikipedia makes the distinction between white hat (good design approved by search engines) versus black hat practices (using techniques such spamdexing or cloaking). This wiki was a strong target for such abusive tactics and this is why new user creation is now being screened.
“SEO means two different things. For Google and honest people, it is an activity which focuses on optimizing sites for crawlers. For the SEO industry, it is an activity focused on boosting rankings. Thanks to the SEO industry the word is no longer useless for the former definition. It has becoming synonymous with boosting rankings.” (Slashdot discussion, March 18 2012).
“I am a partner in a small SEO company and I feel dirty for it, but of course the money is good. Whenever I meet someone from google or Microsoft search I tell them how I long for the day they make my job obsolete. The net effects of of SEO are that search results are corrupted and instead of showing the most relevant or best source of original information, they show results of companies who have bought to most links and paid for the most fake blog and forum posts. SEO is about as bad for society as CDO and CDS trading by financial companies. SEO is robbing society of good information and knowledge.” (Slashdot discussion, March 18 2012).
The idea is to structure a web site and its contents in a way that search engines like, i.e. one should provide both structure and "real" content that will allow to match search terms to some kind of Latent semantic indexing (LSI) vector space and latent semantic analysis (LSA). This is the way to go if you aim at long lasting and solid SEO. Of course, it will take some time.
Read Google Webmaster Guidelines and Yahoo! Webmaster Guidelines
SEO services usually try to insert links in other web sites, either in some acceptable "white" way or through aggressive and counter-productive strategies like wiki spamming.