The term 'Friendly URL' is short for 'user-friendly URLs' and refers to a URL that is easy to read and describes the content on the page. This potentially makes the URL easier to remember and describes the page to Search Engines.
It is believed that the URL is one of the key parameters in the Google algorithm and the inclusion of keywords in the URL is potentially the most powerful means of improving the ranking of a page (provided of course these terms tie up with the content on the page).
The latter URL is the friendly URL. In the case where both URL's can direct a user to the same page, it is important to include a Canonical Link to the primary (friendly) URL.
Friendly URL's also can be used to obscure the parameter workings of the site.