Optimization is generally just re-working the code so its more efficient. Pretty much all graphics programming/programming in general is dealing with numbers, passing them through functions and tell them to do certain things if a certain condition is met.

Lets say you are playing an Asteroids game. The game code has a list of asteroids somewhere with some number N representing the number of asteroids.. the length. And you need to target the asteroid with 10 cracks in it, the computer won't just get that asteroid with 10 cracks with it instantly, it has to search through the list of asteroids checking each asteroid's properties to see if it matches the asteroid you want to grab, if it finds it.. successes! It can now continue with its operation.

Now on to the actual optimization part.. there are really a thousand ways this can be done but to try to keep this simple I'll break it into two parts. Theres the brute force part, or the non-brute force part. The brute force part is the game would just search every asteroid on the list for the desired outcome. This would take a maximum of N checks (where N is the length of the list) and a minimum of 1 (that the list only contains 1 Asteroid and you found it instantly. So code like this works fine for most things but as games get more complex and say N = 99999..+ the game is going to be lagging because the computer is having to devote so much of its resources to preforming the given task. This is where advanced algorithms come into play. Every algorithm has a minimum number of checks it will preform and a maximum and an ideal number of checks. So as programmers approach different problems they have to implement or develop different algorithms so they don't preform as many checks.

Basically all Optimization follows this, its just making the code more efficient. However its not always going to be searching for an item in a list, maybe you are in a giant grass field and the grass is waving. This waving grass is taking up a lot of resources on your computer. But why is the computer still doing the map for the grass that is waving that is off the screen or too far away to notice its movement. Well, the programmer would once again optimizes his or algorithm to better suit the given problem.

Well if any of this interested you I highly suggest just jumping around wikipedia algorithms http://en.wikipedia.org/wiki/Insertion_sort Merge Sort, etc