Superwash is a process whereby your yarn is treated, either before or after spinning (usually, before) so that the colors are completely set (usually) and you can toss your handmade project in a machine wash (ON GENTLE PLEASE). It adds some stability to the fiber, but still may need to be blocked after knitting. 

Superwash wool refers to yarn that has been SPECIFICALLY treated so that it can be washed in the washing machine without shrinking or felting. Your project will still need loving care - most superwash yarns are natural fibers, which is why they are treated.