Mod_Rewrite is a very powerful URL manipulation utility. It is invoked and configured via a .htaccess file which is placed in the folder where one would like to have the URL manipulation take place.
A common example of one way Mod_Rewrite is used to manipulate URLs is to make a website search engine friendly (also known as SEO). Basically search engines like html files better then php files, in addition search engines tend to ignore dynamic files with more then 3 parameters. This is where mod_rewrite comes in handy. With mod_rewrite you can change your URLs so that instead of your visitors and the search engines seeing php files they see html files.
This not only helps to improve the chances of your website being completely indexed by search engines but can also be used for security reasons such as keeping your visitors from knowing what language your website is scripted in so they can’t easily attack and exploit your website. Mod_Rewrite is included at no cost to you in all packages.