Domain parking is where registered domain names are used without any content on the domain. Some people either like to reserve domains or use them for something else (e.g. services such as email, ftp etc).
Domains can then be used as just placeholders or can be monetized to generate income from adverts or services such as google searches.
Monetized parked domains achieve best results if they were previously used (either by the current owner or by registering expired domains). Particularly if there are still multiple inbound links from other sites
Other forms include domains names which are very similar to commercial or successful web sites. For instance, a .com version of a .net or .org website would probably catch traffic typos.
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