Rug binding is a simple yet incredibly useful process in which a strip of cotton, or a similar synthetic material like nylon, is attached to the underside of the edge of a carpet piece. This can be done to repair damage that has been sustained through the normal daily use of the rug, or when the rug is brand new in order to prevent that sort of damage from occurring in the first place.
Moving heavy furniture over the edges of carpet fabric, normal or heavy foot traffic on a regular basis, and other damaging occurrences can build up over time, causing the edge of a once quite attractive rug to become frayed and ugly. Not only does it look bad, it means bad things for your rug; the looser the attachments between the fibers become, the faster it frays.
This means that the damage accelerates the more that the rug is used without repair. Light to medium fraying can be repaired by binding, and all fraying is prevented by it. Having your brand new rug bound will increase the amount of time that you have to enjoy it by several years, preserving your investment. Having your older, slightly damaged rug bound can rid the edges of that jagged, messy look, and grant you many more years of enjoyment from it.