As Michelle mentions in her post, no one is certain what the word actually means, but it is found mostly in the Psalms. It's related to music and often a transition of thought in the lyrics. I like to think of it as a pause, a place to reflect on what was just said or what just happened, and perhaps that reflection will cause my next move to be different than it might have been without that pause.
from Psalm 3
3 But you, Lord, are a shield around me, my glory, the One who lifts my head high.
4 I call out to the Lord, and he answers me from his holy mountain. Selah
It's easy to settle into our fast-food culture spiritually, to say my prayers, check off my intercessions, ask for my needs and move on to the next thing in my day. But if I pause, Selah, and think about the fact that the Lord answers me from his holy mountain, I don't want to move away so quickly. I want to learn to stop long enough to listen, to hear his answer. That only happens in the pause.
I teach yoga. At the end of each class, we settle into a pose called savasana (sha-voh-sun-uh). Literally translated that means corpse pose. I know it sounds a little funny, but sometimes it takes a small death to my to do list in order to stop long enough to listen. At the end of a yoga class, the pause allows time for the body to settle and the mind to assimilate what was practiced before moving on into the day. I watch people who aren't used to this fidget and squirm. Then as they continue coming to class, they begin to settle into this pause, they begin to understand how important it is. It's a quiet place, a place to rest, a place to listen to whatever God is speaking at that moment. Sometimes it's an answer, sometimes it's a sweet affirmation, sometimes it's just a holy quietness like that moment when you're having coffee with a friend and the conversations are over, but you sit still, enjoying the presence of the other.
I try to cultivate that pause into my life. It's not always easy, but it's important.