Bootstrapping: Bootstrapping is a reference to pulling oneself up by the bootstraps. For those who live East of the Rocky Mountains, cowboy boots actually have little straps at the top that you grasp to pull them on. (Unless someone knows something I don't, they can't be used to actually pull oneself up.)
In the venture world, the reference is used, of course, to describe someone who uses her own funds to start a business and then uses the cash flow from the business to fund it--especially in contrast to entrepreneurs who use venture capital.
Frankly, there are very few cases when entrepreneurs really have a choice. Businesses that don't have meaningful capital requirements aren't attractive to venture capitalists for two reasons: first, there may not be an opportunity to invest enough money and second, there may not be enough barriers to entry to create a sustainable competitive advantage.
Seth Godin posted recently on the perils of taking venture capital or even angel investments as the first step in selling one's business. That is true. There are certainly some entrepreneurs who are building businesses that they don't intend to sell. If they have significant capital requirements, however, they may not have a choice.
You may also want to check the Investopedia definition of bootstrapping.
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