I was told many years ago that the seasoned wood (i.e. wood that has been stored outside and covered from the elements) for a year or more has gone through literally thousands of expansion/contraction cycles and thus releases a lot of volatile compounds along with its moisture. This makes it burn more cleanly and evenly, and as DN stated, causes less creosote to be released.
I venture to guess that dried wood is simply the time it takes to loose most of its moisture -- which, depending on the wood, could be just a few months.