WHAT IS SEO?
Search Engine Optimization.
What's that?
''It 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.'' - by Wikipedia

So, whenever you search for a word, item, phrase, etc., you get the list of web results that hold that very same word you searched for. Now, everyone tends to visit the sites on the top of this list therefore these sites make better rank. Wow! So, I'd say this stuff is more important than your site looks. It is, but you still want your web site to look good.

Everyone needs SEO, even BMW! Just make sure you don't get banned like them, or JC Penny. What they used was improper SEO technique and so got banned from the search engine forever.

HOW DOES IT WORK?
The first thing you need to know is that search engines are text driven. That means that search engines are looking for a particular text to get to know what is the site about. They do not care about your cool flash banner or if your background color matches your header. Thus, you need to carefully think what are you to write on your pages.
These searches are performed by so called 'spiders' that have their hands full of indexing new pages and sites that rapidly emerge. ***Just to add a fun fact, there are about 255 million sites as of December 2010.

So, sometimes it takes a month or two for them to notice your new page or updated text. Piece of advice: be patient with them.

When a person searches for something online, the search engines respond with billions of results in an instant second based on relevance and importance. Importance and relevance are determined by algorithms (called 'ranking factors') and yet these are achieved through many factors. In short, they like clean codes, honest keywords, sites made for humans (not only for SEO in mind), useful info (make sure that your <title> elements and ALT attributes are descriptive and accurate.), fresh content, etc.

SO WHAT DO YOU DO?
You can go ahead and educate yourself on SEO more online. There are tons of free e-books and many forums posted online. If you'd like to invest time into this matter, feel free to scroll down to the end of the article and get yourself a list of reference sites that will make a good start. Please keep in mind, you would have to know the code (html or any other) used in your site.

Or, what we'd like to strongly suggest, you hire a SEO specialist. A good SEO specialist is educated in the latest trends and possesses the most up-to-date SEO tools needed. These people make a living out of this fairly new profession, and by hiring them you would be guaranteed to improve your rank.
Now, a word of advice: nobody can promise a first page of Google, as that does not depend on your SEO specialist or the company you hired. There are many factors to be included (and just some of them are: your competition, your keywords, what kind of a site do you have, is there good content - text on your homepage, what geographical region do you want to target, etc.). Yet, a professional SEO person will give you your current status and let you know how likely is to achieve your SEO goals.

WHAT DOES THE SEO SPECIALIST DO?

• Checks your current rank and informs you of your visibility - how much the search engines know about you
• Inquires and talks to you about your keywords.

Keywords are the primary SEO elements as those are the words that users will type in a search box. Keywords are also the crucial short phrases of what you feel describes your site best. There are many factors in determining on how to chose your keywords. Make sure you talk to your SEO person to better understand on how to get the top 5 keywords for your site. Ideally, you know your users well and can properly tell what search strings they are likely to use to search for you. You can also try using a website keywords suggestion tool.

Let's say you are selling the ladies shoes. A 'shoe' should not be a keyword as that is a broad term. In my search, Google US shows there are about 351,000,000  results for 'shoe' only. Instead, you should ask yourself these questions: Are you selling ladies designer shoes? Are they imported from Europe? What is your geographical target market? Are the shoes casual, dress shoes, discount shoes? The more details the better. The keyword can take up to 5 words in. So, a good example would be 'European ladies designer shoes'.

• Makes sure you have great keyword density, and in all the right places.

It is important that you do not overuse keywords in your text on your page as well as that you do not lack targeted keywords and phrases. There are severe penalties from stuffing your pages with keywords as it is an unethical practice that manipulates the search results (you can even get banned from the search engine forever, a death penalty that is).
As of the right places, it is helpful if you have a part of the keyword in your domain name, however, it is essential that you have them in your titles and headings.

• Will create your site's description and meta tags.
• Will make sure you understand that your site content is the key.

A SEO specialist will ask you to provide well thought of and relevant content-text for your site. This text will be rich in keywords and you may want to consider in hiring a copywriter (professional writer). If you are OK with writing it yourself that is fine too as long as you put some work in it. You should know that there should not be any misspellings, you shouldn't brag on how great you are (saying we are the best online store, etc., will not get you the results), you should not copy the same text or steal it from somewhere else and you should keep it interesting so people will read through the whole page.
Please be aware that SEO companies do not write the text for you (unless they have a copy writer in the company) as they do not know that much about your area of expertise. Imagine how many different clients can a company like that have, from dentist to photographers, rock singers to software companies, pet stores to spas, etc. On the other hand, SEO people can certainly help in screening your text and pointing out on mistakes you made.

• Will advise to avoid the use of flash, java script and frames (as we said, text is the key, not animations, slides and flying elements)
• Will submit your site to 'open directory project'

'The Open Directory Project'' is the largest, most comprehensive human-edited directory of the Web. It is constructed and maintained by a vast, global community of volunteer editors.' - by ODP  (This is a directory that Google trusts most, surely as of the human factor involved.)

• Will check/validate your HTML (make sure your code is clean)
• Will monitor and constantly work on improving

SEO job is complex and takes time. It cannot be completed within one day or one week or one month. It takes patience and constant monitoring. And even once you hit the spot, there is still work to be done just  to maintain the rank (search engines change constantly, new trends emerge, new tools are introduced and competitor sites are being improved)

• And keep you updated on the rank and site's visibility improvements
• Will suggest other ways of bringing more traffic to your site (like blogging, social networking, etc.)

___________________________________________________________________________

RESOURCES

Beginners guide
Step by step SEO guide
The importance of the content/text and how can you go wrong
The Dirty Little Secrets of Search - a New York Times article of how JC Penny went the wrong way
Website keywords suggestion tool  + What small business clients need to know about keywords and SEO
Good vs. bad SEO
Avoid Black Hat SEO Techniques