DC Offset is pretty much what the name suggests - there is an offset from 0V (DC, I assume) to some other voltage, say, 4V. I guess the best way to explain it is when you look at a scope diagram. For example, say you're looking at a waveform that looks like http://www.innovatia.com/Design_Center/DC_images/image707.gif [Broken]. The mean of the waveform (the dotted line) is above 0, and that height in the Y-axis is the offset.
I remember dealing with this in my engineering lab. I think we used a capacitor to act as a filter to get rid of the DC offset. The reason that I think a capacitor works is that a capacitor is an open circuit to DC, so none of that offset voltage passes through it, giving you a "clean" waveform.