Robot.txt is a file placed in root folder of your domain.
It has instructions for search engines bots which content on your website it should check and index.

Using it is very helpful when you have more complex site structure and you don't want show all your content to the outside world.

Here is more about it:
The Web Robots Pages

You can get detailed explanation of robot.txt at The Web Robots Pages

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You can go to robotstxt.org or can get help of Wikipedia to get exact definition.

Basically Robot.txt is a File which is located on your web server, the main objective of robot.txt is to allow Bots/Crawlers to Indexed your web pages. You can also restrict pages from indexing through Robot.txt File!

HI
Robots.txt is the automated software which tell search engine what to crawl what to not.

You can also find a very similar robots.txt discussion in this thread: warriorforum.com/adsense-ppc-seo-discussion-forum/534078-robots-txt.html

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If I restrict a page for crawling Google wouldn't crawl it then can I use black hat technique onto that page?

Robots.txt is a .txt file, which tell search engines that what to index or not on a particular websites.

Here is one example:

User-agent: *
Disallow: /

So how can I create this robot.txt. Should I open a new txt document and just rename it to robot?

Open up a notepad and save the file as 'robots.txt'

How effective or helpful is Robots.txt for seo? There's a few warriors selling it in their seo packages saying it will improve rankings?

Go to Google's WebMaster Tools site (do a Google search) and add your site.

Then click on "site configuration" on the left hand side, then "crawler access" and it will allow you to create/edit and test a robots.text file that you can then save and upload to your site all for free!

Don't pay for this file, it's very simple to do and can be very good for controlling what the search engines do with your site and what they show in search results.

Robots.txt is a de-facto standard, which means it is used by people following web SEO standards, but not mandatory by any search engine or web standards authority.

In other words, it is not necessary, but good to have.

For more info visit: The Web Robots Pages

Robots.txt is a text file and it is used to keep out content from the crawling method of search engine spiders. Here i define use to robot.txt file.

User agent: this factor describes, for which spider the next factors will be valid. * is a wildcard which mean all spiders or Googlebot for Google.

Disallow: describes which folders will be prohibited. Nothing means not anything will be excluded, means the whole thing will be excluded or , folder name can be used to identify the values to prohibited.

Robots.txt placed in root folder of the domain..it allows or disallows some search engines to crawl particular part of your site..

Robot.txt is the command to search engine bot whether you would like to index or not index through bot tags.

If you don't want to index then you can add dis allow: page path or else if you want to index any page then allow: page path

allow only google adsense bot using robots.txt

add the following two-line code

User-agent: Mediapartners-Google
Disallow:

Does blogspot have it?

robot txt are metatags you use to avoid search engines from crawing your site

Some companies doesn't allow anybody to view their personal page or accounts pages so they put txt file on that page.you can't do that on free blogging sites.

robots.txt is use for inform to search engine spiders that which pages are use for crawling and which are not. Suppose you use some irrelevant pages in your website which are necessary for your website. when Google spiders will come and they get irrelevant pages on your website then it will harmful for your website. The best solution to avoid it, is use of robots.txt.