A static website is one that is written in HTML only. Each page is a separate document and there is no database that it draws on. What this means functionally is that the only way to edit the site is to go into each page and edit the HTML code. This means that you would either have to do it yourself using an html editor like Dreamweaver or FrontPage or pay someone like us to go in and make the changes (see our website maintenance)
On the other hand a dynamic website is written using more complex code, generally with a multitude of languages and can do a lot more. For example, a content mangement system (CMS) like AiWrite is a dynamic website as you have an area where you can log in and change various parts of the site, such as adding pages, news and frequently asked questions. This is possible because each page is constructed based on the information taken from a database, and the information in that database can be changed via the management interface.
Dynamic sites have another benefit that they allow you to change only the content of the website, without affecting the design. Another benefit is noticed when websites start to get very large, as they make data management much more efficient, easy and your website more expandable.