What does SLI ready mean and how do I use it?

I have an SLI ready power supply and video card. I'm looking at getting another video card so I can have 3 monitors. What is SLI? I think it's got something to do with treating 2 video cards as 1. If that's the case, is there any performance hit for using 2 video cards of different memory/specs ?

I'm running GeForce GTX 460

From wikipedia

Scalable Link Interface (SLI) is a brand name for a multi-GPU solution developed by NVIDIA for linking two or more video cards together to produce a single output. SLI is an application of parallel processing for computer graphics, meant to increase the processing power available for graphics.

An SLI ready card or power supply means it's capable of adding a second (or more) video card. Adding a second card usually can increase overall performance but there are times when the communication between the two cards can create overhead (see micro stuttering)

You don't specify which video card you currently have but you may not need a second card just to drive three monitors. If you just want to have an extended desktop with three screens your current card may support that option. Depends on the outputs and options. If you want to have three screens for game playing you may need a second card depending on what resolution and level of quality you enable but this is not a requirement. I use a single AMD XFX 6950 on three monitors for both work and gaming just fine.

SLI ready means that the video card can be put into a SLI configuration. SLI configurations essentially "connect" the video cards together and allow them to work together. There is a performance hit when adding a second video card. When adding a second video card you should expect to see about a 90% increase. If this was a perfect world it would be a 100% increase but sadly this is not a perfect world. Memory shouldn't take a hit in terms of size however.