URL rewriting can be one of the best and quickest ways to improve the usability and search friendliness of your site. It can also be the source of near-unending misery and suffering. Definitely worth playing carefully with it - lots of testing is recommended. With great power comes great responsibility, and all that.

There are several other guides on the web already, that may suit your needs better than this one.

A beginner's guide to URL rewriting, with plenty of examples. This can be done via the .htaccess file. This is an excellent read.