Hello,
In fact there are several types of URL
Standard URLs:
domain.php?p=12
Basic Friendly URLs:
domain.php?product-12
Advanced Friendly URLs:
domain.php/product-12
Mod Rewrite Friendly URLs:
domain/product-12
The difference is in how they are written or rewritten in .htaccess file, if RewriteEngine on and rewrite rules are defined for your server.
Enabling friendly URLs can increase your site's ranking in search engines and can be useful and friendly for users to understand the URL's that they follow.
Radu