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Well… basically a website that is built search engine friendly, is made to appeal to the "Spiders" that are searching online for the search engines (like Google, MSN & Live, ASK, Yahoo, etc.).
A common misconception of the search engines is that when you type in your keyword phrase and search for it you are searching the entire web.
But the truth is when you click "Search" you are not searching the entire internet you are actually searching their (Google, MSN, etc.) database of what they indexed to be online.
So think about spiders searching through a huge filing cabinet of what they (the search engines) found on the entire web.
By having a search engine friendly site you are making it easier for the spiders to find your site, index it and allow it to be part of search results.
With out a SEO friendly website you will not get indexed on their huge database and never show up in the results. Leaving you in the dark or paying for PPC (Pay-Per-Click ads).