There is a member at the forums named seomike, he often comes to Search Engine Watch and gives some very clear and useful tips on how to improve a dynamic site's search visibility. Recently he posted 3 mod rewrite tips and tricks, and clearly explains how and what they do.
In his first tip, he details how to rewrite a dynamic URL with exact variables in the URL to a static looking URL. His example dynamic URL is: www.somesite.com/catalog.php?cat=widgets&product_id=1234. The new example static URL is: www.somesite.com/catalog/widgets-1234.html
The code used to make this possible:
#start .htaccess code RewriteEngine On RewriteBase /RewriteCond %{QUERY_STRING} ^cat\=([^&]+)\&product_id\=([^&]+)$ RewriteRule ^$ /catalog/%1-%2.html [R=301,L]
In tip two he explains how to "Change a product name or change a mispelling and you've just lost all page scores to the static mod rewritten url."
And in tip three he explains how to "Make the unormalized, normalized for Yahoo!'s sake."
It is worth checking out this thread if you have a dynamic site and you can utilize mod_rewrite rules.