Rewriting is taking content from either online of offline and rewriting it in your own words. As long as it's at least 85% unique from the original article, it's considered new content and can be submitted to AC. To check to make sure the article is at least 85% unique after rewriting, you can use Copyscape or a free software called DupefreePRO.
We talk about it in length in this thread ...
http://www.blackhatworld.com/blackhat-seo/associated-content-writing-articles/77524-made-30-two-articles-today.html
Good luck