Richard Gaywood of TUAW with a really excellent post on what TRIM is, why SSDs need it, and how it works:

TRIM is the more elegant method you are looking for. It’s like a finishing school for your operating system that gives it the manners to tell a drive when a file is deleted. It’s an extension to the SATA command set that, quite simply, sends the drive a courtesy message about inactive blocks. “Hey, see all these pages here? These can be erased now. I’m done with that data. Get on with it.”

If you have/want an SSD, this is a must read.