A Permalink is a permanent link which points to a particular blog entry or forum entry. For example the permalink for this blog article is http://csharp-codesamples.com/2009/03/aspnet-permalinks-using-url-rewriting.
This does not mean that a physical page is created for each blog entry. Instead a single page shows the data for multiple blogs articles dynamically based on some query string.
But all pages in asp.net end with a .aspx extension and if we pass a query string to the page it will look something like Page.aspx?query=test. These links are not very search engine friendly.
This article describes a simple method to create permalinks and improve your asp.net websites search engine optimization using URL rewriting without the use of custom handlers.