Permalinks are the permanent URLs to your individual weblog posts, as well as categories and other lists of weblog postings. A custom Permalink structure will make your blog more SEO friendly.

Especially with "Custom Permalinks" plugin, you can set the URL of any post, page, tag or category to anything you want. Old permalinks will redirect properly to the new address.

Custom Permalinks gives you ultimate control over your site structure. It also allows you to remove titles of parent pages from urls  (You can download Custom Permalinks plugin at http://wordpress.org/extend/plugins/custom-permalinks/).