There is an easy way to improve the SEO of your Magento store by removing the .html extension from the url
Example:
We have a category called Shoes

• http://mydomain.com/default/shoes.html

And we want to have an URL like this:

• http://mydomain.com/default/shoes

Now go to your Admin Panel. System -> Configuration. Then go to Catalog and expand the Search Engine Optimization tab.
Remove the “.html” text from both the input fields. Product URL Suffix and Category URL Suffix.
Finally the page will look like this screenshot: