Muting is the use of your hand to muffle, deaden, or stop the sound of the strings (or notes) you're playing. There are two kinds of muting, the palm mute and the fret-hand mute.
Muting a string is simple: with the fretting hand, touch the string with a finger, but do not press it down, and strike the string. It is usually best to do this where a harmonic will not result, but strings can be muted at harmonics for special effect. In tablature, muted notes are marked with an "x" instead of a fret number.
Palm muting may or may not make the pitch of the string discernable. Very lightly rest the palm of the hand on or near the bridge, then fret and strike strings normally. Palm-muted notes are sometimes notated the same way as muted notes when the pitch is not discernable; otherwise fret numbers are given normally and the muted notes are marked "P.M." in tablature. (Courtesy of Wikibooks)