No problem man.
Basically, beta testing is when they release a piece of software to outside developers (non-Apple folks) to put on their iPhone and use. Then, those developers give Apple feedback about problems they encounter.
Once Apple has a decent amount of feedback, they go back in and fix the bugs reported to them, and then eventually release another beta. This process repeats until Apple is satisfied that things are ship-shape, then they release to the public.
Beta testing is a standard procedure for a lot of software development life cycles. Some companies (take Mozilla for instance) release their betas to anyone brave enough to try them. Then they collect feedback from those using the product and/or automated data dumps.
Wikipedia has this little blurb about beta testing:
"Beta testing comes after alpha testing. Versions of the software, known as beta versions, are released to a limited audience outside of the programming team. The software is released to groups of people so that further testing can ensure the product has few faults or bugs. Sometimes, beta versions are made available to the open public to increase the feedback field to a maximal number of future users."