This article addresses SEF URLs under the popular, open-source Apache webserver.
SEF URL implementation is possible under Microsoft's IIS webserver as well, please see IIS and Joomla.
In Joomla! 1.6 basic SEF urls are enabled by default. In prior versions you need to use the Global Configuration to enable them. The instructions below still apply if you want to use Apache's mod_rewrite.
LoadModule rewrite_module modules/mod_rewrite.so
I believe the following are the most common possibilities for how URLs look in Joomla 1.5 or 1.6. Someone who knows better please confirm if the below is true:
non-SEF (Joomla 1.5 default):
This is typical of the easiest Non-SEF URLs to understand. None of them are findable by search engines because they don't have an ".html" suffix. See SEF Ugly for their other disadvantages. These are a result of Joomla generating dynamic webpages and the need ensure their URL's are unique. In Joomla 1.6 you won't see this unless you change default SEF Global Config settings above.
SEF Ugly (Joomla 1.6 default):
These are findable by search engines but ugly to remember and harder for a visitor to paste in an email. Their length may break a pasted URL in an email so you lose visitors. Most websites link to other pages of the same site. Admin must paste those links into your site, the easiest way to use SEF Ugly links is to browse to the target page while editing the other. Even with the three settings above, this what you may get if your hosting service has not correctly installed the appropriate server change.
SEF Pretty URL:
This is findable by search engines and easy to remember. It is easier for Admin to type into another page of site or for a visitor to type in an email. This requires Joomla 1.5 or 1.6 with the three SEF settings as above, plus the appropriate server change installed. Notice Admin is responsible for ensuring alias names are unique for each page of your site, otherwise visiting results are unpredictable.
You want SEF Pretty URLs as early as possible. They will bring visitors because they remember it or a friend sent them an email about it. Converting from non-SEF or SEF Ugly can be a lot of URL retyping in your site. Search engines rate the URL itself worthy as a search result. Changing the URL later will lose prior search value history about that page unless you take more technical measures.