What does "radio edit" mean in a song?

A radio edit is an alternative version (of a recorded performance) that has been re-mixed and edited so as to be better-suited than the original for getting played on commercial radio.

As others have noted, this is typically to shorten a longer track so as to bring it down to a length more suitable for radio play (there is no ''industry standard'' ideal length but anything over 3:30 or so may make it difficult to get playlisted); or to remove contentious lyrics, profanity or any other element that may discourage producers and DJs from playing it.

Many radio edits have also been remixed and/or EQd so as to make the dynamic range of the recording more suitable for reproduction on audio equipment that is less capable than a full-blown system. What sounds good in the studio or on a top-of-the-range audio system may need tweaking if it's to come over with the same overall balance and impact when listened to via iTunes on a budget docking unit or cheap headphones.

Radio edit is: try to fit the song into 3:40 or a bit longer if you can't and singing should start at 0:30 or sooner. No long intros, no long breakdowns, make it as short as possible and pack as many hooks and other things that stand out per second of recording. It might also have "clean" lyrics. Compare to club edits that can be up to 9 minutes long instead. 

A "radio edit" version has been modified in some way - usually for length, but also to get rid of profanity or other material that would make the song less commercially viable for radio play. In some countries, such as the United States, government agencies impose restrictions on profanity.

Usually, 'radio edit' means that the same song is shorter than the original one included in the official album. Usually, 'radio edits' are included as bonus materials in the CD itself. 

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