This is pretty great news so I'm going to post it now instead of waiting for Monday so you Etsy sellers have the weekend to look it over and make changes.
In case you have been out of the loop or don't frequent the Etsy forums much they had a bit of a debacle earlier this year over their SEO changes. To basically sum it up, Etsy tried to do the SEO all by themselves without really knowing enough about it to do it right, they made changes without informing sellers, and the changes were less than successful. I'm of the opinion it was not as bad as some people who flipped out over it but it was a mess. In the wake of this Etsy did the smart thing and hired SEOmoz an experienced SEO company to consult with and make changes to the site. The first round of SEOmox suggested changes rolled out this week.
Here's the article describing the changes: Tech Update: Changes for Shop and Item Page SEO
SEOmoz also put together a great guide to SEO specifically for Etsy sellers detailing the ways you can optimize your site. Download the guide (pdf)