In a nutshell, some of the engines, smart as they are, have trouble seeing the following as the same site:
http://domain.com
http://www.domain.com

We clearly know it's the same content, same site, etc. The engines, though, see this as the same content residing at different URLs - hence, duplicate content.

Now, for the most part this is not a complete deal-breaker in obtaining high rankings with the engines organically...provided no one else has it sorted out. If your competition has this covered, you're toast.

Best bet then, is to make sure that the non-www version of your domain redirects to the www version of the domain.