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Taken from the System Reference Document FAQ. Follow the link for the complete FAQ.
Q: What is the System Reference Document?
A: The System Reference Document (SRD) is a comprehensive toolbox consisting of rules, races, classes, feats, skills, various systems, spells, magic items and monsters compatible with the d20 System version of Dungeons & Dragons and various other roleplaying games from Wizards of the Coast.
Q: What's missing from the SRD compared to the core D&D rulebooks?
A: Mostly the "flavor" elements. There are no named gods, none of the spells have significant NPC names, there's no mention of Greyhawk, etc. You'll also note that there are no rules for character creation, for advancing characters in level, calculating experience, or anything else related to the topics forbidden by the d20 System Trademark Guide.
Q: Why not just say that the D&D books are Open Game Content?
A: Because they aren't. Those books are full of examples, artwork, trademarks, and characters and settings we don't want to give a royalty-free, worldwide, nonexclusive right to copy modify and distribute. The SRD makes it crystal clear what Wizards of the Coast considers to be Open Game Content and what it does not. Again, this reinforces the concept of the safe harbor.
Q: If I find something in a Wizards of the Coast book and I think it should be Open Game Content, can I just write a version of that material in my own words?
A: If you can do so without creating a derivative work as that term is used in Title 17 of the US Copyright law, infringing a trademark you don't own, and any number of other legal landmines, you're more than welcome to do so. Of course, you should consult your legal counsel before attempting such a thing.
Q: How will you handle trademarks from licenses in the System Reference Document?
A: There will not be any trademarked content in the SRD. That means that the SRD will never contain words like "Elminster," "Wookiee," "Jedi," or even "the Force."