Steeks are areas of knitting that need to be cut to form openings in the knitted fabric. They are usually done in circular knitting so that the knitting can be completed without slowing down for shaping or reverting to back and forth knitting.
For example, the upper body would be worked in the round for the entire length (possibly with the exception of the neckline shaping). Once the body is worked up to the shoulders, the area where the arms need to come out is cut to form the opening where the sleeves will be attached. Steeks can be machine sewn or crocheted. With some very “sticky” wool yarns that will felt easily, it is not necessary to reinforce the knitting with stitching before cutting. In this case, you need to take extra care when sewing the pieces of the garment in place not to unravel the knitting.
Machine sewn arm hole steek
Measure the upper width of the sleeves without stretching. Mark off this width on each side of the body from the top down for the armholes. Sew 2 machine seams along sides and across bottom of each armhole area equal to 4 stitches in width (the number of stitches may vary based on the pattern instructions). Baste down the center of the armhole in contrast colored thread to mark the cutting line. Cut between machine seams being careful not to cut through armhole stitching. Sew shoulders together from the right side using matching yarn. Sew the sleeves in place from the right side through the stitch in the body of the sweater next to the machine seams and through the lower loops of first purl round of the sleeve facing. Sew/tack facing down over the cut edges on the wrong side of the body.
Good websites and tutorials
From Mary Ann Stephens: [Steek Introduction]. I love this link, as in addition to the regular steek, she has a really clever way to do a covered steek. Check it out! She also has lovely patterns.