The  term "Web 2.0" has been bantered around for long enough now that it no longer needs explanation. I usually sum up its meaning into the result it gets... a Web 2.0 site gets better as a result of more users using it because the users interact with it and contribute to its content. Examples are E-Bay, WikiPedia, MySpace, and the list goes on.

BungeeBones system will produce that same result. As more websites add the web directory to their website they begin adding to and increasing the amount of potential viewers of the links in the directory.

Each of those new visitors to the directory are potential paid advertisers, purchasing advertising space on the directy (which gets shared with the webmasters (see revenue sharing)) and/or they might add the directory also and increase the traffic volume even more.

The WikiPedia article about Web 2.0  (in the left menu) is very informative of the whole concept.