HI emma, in laymans terms, it's establishing a colony of bactiera that will convert ammonia (fish waste) into nitrite (both highly toxic to fish) then convert nitrite into nitrate, the end product, (nitrate is also toxic at high levels), which can be diluted by water changes.
Once a tank is cycled there should be no ammonia or nitrite present, the bacteria lives in the filter, the substrate (sand or gravel) on plants and rocks or pebbles or whatever else is in your tank, hope that helps.
thanks slider, great help, yes did all that when I got my tank, just didnt no the technical term for it. I'm very new at this and the pet shops in the uk are **** and tell you nothing. ive learnt so much from this site. e.g I have to many fish in my tank, to many males to females and wondered why all the males were fighting. you guys have been a great help. emma :-*