Joomla has built-in SEO functionality.(SEO stands for Search Engine Optimization). The SEO tab in Global Configuration (in Administration backend)takes care of global SEO settings for your Joomla site.

The tricky part is enabling search engine friendly URLs. If you are wondering what are those good for, here's an example:
A non-sef URL:
www.site.org/index.php?option=com_weblinks&task=view&Itemid=22

The Joomla SEF version of the previous URL:

http://www.teachmejoomla.com/component/option,com_weblinks/Itemid,22/ 

3rd party SEF extensions may display "friendlier" URLs, such as

http://www.teachmejoomla.com/useful-links/link-list.html 

These URLs look like static sites for SE crawlers(which is good), and may be easier to memorize and more relevant to your human visitors(especially the ones like the last example). Aditionally, keywords in urls get you a higher search engine positioning in results.

1. Check SEF URLs Requirements

• You need mod_rewrite module on apache. Most hosting companies have that module installed.
• Furthermore, you need Apache configuration to allow .htaccess files.

2.Configure SEF URLs and rename the htaccess.txt

• Goto Admin->Global Configuration->Site
• In SEO Settings, set Search Engine Friendly URLs to yes
• Set Use Apache mod_rewrite module to yes
• Save your settings
• Goto your Joomla! root directory and rename htaccess.txt to .htaccess
• Open .htaccess file to edit
• If commented, uncomment RewriteEngine On
• If commented, uncomment RewriteBase / and set your Joomla! base correctly (just / for root)
• If commented, uncomment Options +FollowSymLinks
• Save the file and close

All done! Your SEF URLs should now work for your Joomla! Website.