An ebook is literally a book in electronic form. There are several proprietary file formats for ebooks that need particular software to read, but most are now published in PDF format, as its cross platform. Sometimes ebooks are paid for, other times they are offered as a free download.

Having an ebook on your site for users to download can help your site in a number of ways, provided the content is good:

It provides additional value for your users.

It provides a large document with lots of relevant text for spiders to index (most search engines index PDF text quite happily).

It can act as link bait - encouraging others who have found it useful to link to your site, or the document itself.

It can help your site seem more authoritative on a subject.

Publishing an ebook gives you a great excuse to submit press releases to lots of different PR sites advertising the fact, and containing links to your site and the document. These may get picked up by news sites for your niche, who will write about you.

One thing - it's a good idea to have a link to your site encoded in the PDF, so that if a spider or user follows a link directly to the document, they can get to the rest of your site easily, and it also reminds users who download it where they got it from.

Hope that helps.

Pete