To put it simply, DMA (Direct Memory Access) provides a way for your CDROM (or any drive/device that enables/supports it) to access the memory directly, thereby lightening the load on your cpu.. this is in direct contrast to the PIO method (Programmed Input/Output) where there is cpu intervention. Using PIO when reading for example, first data is taken from the pheripheral device (i.e. CDROM) transferred to the CPU registers then transferred again to memory.. which needless to say hogs CPU time..
So therefore enabling DMA helps boost performance by taking the load off of your CPU when accessing the CDROM drive..
Wow! Short and great explanation, Xeven. Just to add some info, the DMA option is available not only under cdrom, but also the hd settings. If your devices support dma, use it. Mainly in your hd. Most hds support dma, but there are different versions which gives you different transfer speeds(these are most for hds, since cdroms doesn't transfer at such a high speed):
UltraDMA5=100MB/s(the latest one)
Your BIOS must have dma tranfers enabled also.