Above the Fold
What exactly is meant by "above the fold". Easy to explain. The first time you land on this website (blog), what do you see? To make it clear, I will take a screenshot (before this post is published and click to enlarge):
The part a visitor first see without having to scroll down using the vertical scroll bar is called the "Above the fold". The term came from the newspaper. The newspapers you see in newspaper vendors are all folded, and you will first see the headlines. These are what the newspaper editors want you to see first, what they consider to be the most important news of the day.
I will equate it to the ground floor of shop houses and shopping mall. People are by nature lazy. If they can find something on the ground floor, they would prefer to buy them on the ground floor. They would rather not climb stairs to go to the first or higher floors. This is prime real estate, the most valuable estate that you can have.
Similar with section "above the fold" of your website. You try to put what you thing are the most important things in this section, those things that you want your visitors to see when they first land on your site. If they don't see something that attracts them immediately, it is likely they will surf away to another site.
Depending on what you consider important, you may put navigation aids like labels (categories) or menu bar which help your visitor quickly find the topics they want to read by clicking on the appropriate label or menu. If you want your advertisements to be displayed prominently, you will put them here, but you may sacrifice a bit of convenience for your visitors as to see the rest, they may have to scroll vertically down to see the rest. Only you can decide what is most important to you.