SVG stands for Scalable Vector Graphics.
For more on SVG, check this out: http://en.wikipedia.org/wiki/Scalable_Vector_Graphics
InkScape is a vector programme, and SVG is its native file format. Inkscape is an OpenSource application and can be downloaded for FREE from:
In case you need to work with vector graphics and dont have access to Adobe Illustrator, use Inkscape.
The SVG file format can be written and read by Adobe Illustrator.
I still use SVG when needed.
Hope that helps