There are many reasons for redirecting URLs: Web pages may have moved but their old URLs may still be bookmarked by visitors, indexed by search engines and back or reciprocally linked by other websites.
Without a redirect this traffic would be lost to a 404 Server Error, the website will not only lose visitors but search engine reputation (links, page-rank and possibly even its listing) as well.
There are several ways to redirect domains; however, some of them are not search engine friendly. The best way to redirect URLs is to use a 301 redirect, since major search engines like Google and Yahoo endorse 301 redirects.
This article sums up URL redirection methods, along with pro's and con's.
