GSM 850 is simply any GSM technology that is operating in the 850 MHz frequency band.
In 2002, GSM began operating in both the 850 MHz frequency band and the 1900 MHz frequency band, which had been the only band used before GSM 850.
Those bands however only work in the US, and therefore unless you have a quad-band phone your phone will not work in Europe and Asia where GSM 900 is used.