Bad subject Line. should be "What does rooted mean?"
Gives you access to the areas of the phone you do not have when you get it. Allows you to access and change sections of the phone you don't have permission to without root access.
In addition to what was said above, you should then be able to get rid of some of the crapware VZW has included with your phone. But you would want to be very selective lest you disable something integral to its operation.
Technically not available yet. The Desire has been rooted which is like the Euro version of Incredible and it was said that once the Desire was rooted the Incred should follow short after. Well that was about 3 weeks ago. Haven't heard anything since. Also for others that want to know what root is, there is a definitely a thread about this somewhere on these forums. My guess would be the help and how to forum. Either perform a search or someone would be generous enough to post a link. I'm on my Droid so I can't at this time.