Damn I feel old and crusty, porting is when you take a little material out of the ports on the engine. Ports are the passage ways that the fuel/air and exhaust go thru. The idea is to increase the size of the passage to let everything flow better. In some engines it helps to have the ports smooth, to eliminate turbulance, in others you want it rough to increase the turbulance. This depends on the engine, and how good your carb. is at mixing the fuel and air.
Porting if done wrong can REALLY mess up an engine, especially a 2-cycle, because the timing of the intake and exhaust relies completly on the size and location of your ports in the piston wall. Also, it's really bad to get aluminum shavings and dust in an engine, so you have to really clean it up when you'r done.
Most of the time when you port an engine you clean up the casting flash and the rough texture left by the sand-casting process. This is relativly easy if you take it really slow and carefull.
The other "trick" is to gasket-match your head and engine. You take a gasket and trace the inside profile on each peice that mates together. You then remove material untill you reach the line that you traced and blend in the area untill it is smooth, with no abrupt changes. This creates a smooth transition for the gasses as they go from one part to annother.
Some advice- don't do this unless you have at least one spare engine that you are willing to turn into a PERMANENT door stop. It's really easy to get carried away, and before you know it, you have gone thru the side of the engine, or messed up a bearing-surface. You may even acidentially take out a strengthening rib, wich will cause a crack, or open up a bolt-hole from the back side. The piont is, before you start dremeling away, make sure that you know where everything is supposed to be, and don't screw up what already works.
Actually from the mopeds that I've dealt with, most of them can't really be improved from the original. (it's an almost perfect machine to begin with) That's why most of you havn't heard of porting, in relation to mopeds, anyway.