Currently web 2.0 is not defined well enough for me to discuss it here, but we can cover AJAX (Asynchronous JavaScript and XML) as it is, in simple terms: A bundle of existing technologies, used to achieve a new structure for web applications. As far as web 2.0 is concerned AJAX is a key enabling technology.

The traditional web model works like this:
The browser (user) requests a webpage > the user clicks a link and an HTTP Get request is sent to the server > the web server deals with the request and sends the webpage to the browser (user).

If the user wants to send information to the server (clicking on something) another request is made with the same process. This communication method is called "synchronous" as information can only be exchanged by requesting and receiving whole web pages.

The AJAX web model works like this:
The browser (user) requests a webpage > once the full page is loaded client/server communication can carry on asynchronously- as only partial user interface update requests are made.

The asynchronicity can be explained by understanding that where only a few pieces of the web page require modification by user interactions (clicks etc.), they alone are updated, rather than the whole page.  

The client side (browser) code which enables this is often called the AJAX engine. It manages the interactions between the client and the server, and therefore reduces the volume of communication needed. This is why AJAX-enabled sites can deliver such rich information without grinding to a halt or eating bandwidth. There is no 'standard' for AJAX engines, and so different web applications will handle similar functions in different ways.

To achieve the Holy Grail of asynchronicity AJAX uses a client-side scripting language (usually JavaScript, but VBScript and others can be used), An XmlHttpRequest object (provided by the web browser), and a Response data format.

Within this techno babble I intentionally concentrated on JavaScript- this is where search engine friendliness can become a real issue. Read part two to discover why AJAX creates SEO problems.