What do they mean by "ethical" seo?
Search engine optimization means doing things to and for a website and its pages in an attempt to gain higher rankings for the site than it would otherwise have. Part of it is modifying a site's existing web pages so that they more closely match a search engine's ranking algorithm, and other parts include creating additional domains and special pages (doorway pages) that are designed to rank highly.
Self-styled "ethical" search engine optimizers accept certain methods but not others. Those that they accept, they call "ethical"; those that they reject they call "unethical". Basically, they say that a site's genuine content pages are the only pages to perform search engine optimization on in an ethical way, and that it is unethical to create new pages for optimization purposes if those new pages are not incorporated into the site as genuine content pages. Also, they differentiate between the different things that can be done on the content pages so that some methods, such as hidden text, are unethical, whereas some other methods are not.
Their rule of thumb is:- if it can seen by site visitors as a genuine, integral part of the website, then it is ethical; if it is hidden from site visitors, or is seen but not as a genuine, integral part of the website, then it is unethical.