Definitions and History
Scalable Link Interface (SLi) is a platform developed by nVidia that links two (or more) video cards together to increase 3D performance or video quality (or both) in games and applications. The original SLI was invented by now defunct 3DFX in 1998 and then stood for Scan-Line Interleave. In 2001 nVidia purchased 3DFX and aquired the patents and technology for the original SLI. The current form of SLi (nVidia's version) was introduced in 2004. Though both versions of SLI have the same acronym, the way in which each system works is completely different from one another. Also note that nVidia's SLi uses a lowercase "i" whereas 3DFX's version uses an upcase "I".
The nVidia SLi platform requires a minimum of 2 nVidia based video cards, an SLi capable motherboard, and a rather beefy power supply to work. Both video cards must have PCI-E 16x connectors and both must be of the 6xxx series or greater. Generally speaking, any video card introduced after the 6800 is able to work in SLi mode. The exception being very low end solutions like the nVidia TurboCache series.
How it works
ATI has their own version of SLi called CrossFire. Both platforms are capable of rendering frames in two different ways, Alternate Frame Rendering (AFR) and Split Frame Rendering (SFR). Crossfire is also capable of supertiling, though it's rarely used. The most common form of frame rendering for both plaforms is AFR. The difference between AFR and SFR is rather simple. In AFR mode, the cards reduce work loads by rendering alternate frames from the 3D scene. (I.E., one card renders a frame while the other card renders the next frame and so on.) SFR works by spliting the frame in half (horizontally for SLi and horizontially or vertically for Crossfire). One card renders the top half of the frame and the other card renders the bottom half. This is also known as scissoring. Determination of which mode is used is made by the game or application in use. Though not a requirement, nVidia recommends that SLi profiles use the AFR method of rendering.