Web 2.0 is the second generation of the internet.
The first generation of the internet (Web 1.0) was a "read only" web for the majority of internet users. If users did not possess the right tools or technologies to create a website they could only read what other people have published.
The second generation of the internet (Web 2.0) is a "read-write" web for the majority of internet users. Users now have access to a wide variety of online tools that enable them to create and publish their own materials on the net.
Web 2.0 includes online tools such as blogs, photo and video sharing, podcasts, social bookmarking, social networking, wikis and more.
Web 2.0 is all about
Source: Web 2.0 Survival Guide
(What is Web 2.0? was created at Tyndale University. Permission to use was given by Mark Mueller.)