An IP address is a number composed of four parts (called octets) that is used to identify your computer on the internet. (The format is 126.96.36.199 - four octets make up one address.)
There are two types of IP addresses that a computer can have - static and dynamic. Your Internet Service Provider (ISP) determines which type you have, but in general, residential accounts have dynamic IP addresses and business accounts have static IP addresses.
If you have a static IP address, your IP address does not change and is used as a consistent identifier for your computer by other computers on the Internet.
If you have a dynamic IP address, then when your computer connects to the Internet, you will get a randomly assigned IP address from a pool of IP addresses available from your ISP, and the IP address assigned to you may be different every time you connect.
IP addresses are important in email delivery. When you send a piece of mail, the headers of that mail will contain your IP address.
If you have a static IP address, this allows AOL (or any other recipient of the email) to 'track' that piece of email from where it was sent to our incoming mail servers.
If you have a dynamic IP address, we cannot perform this tracking, and so AOL is unable to accept mail from mail servers hosted on dynamic IP addresses.
IP addresses are also how your reverse DNS is determined.
AOL requires that all connecting mail servers have a static IP address with reverse DNS enabled.