ANY one know what a ';1099'; situation is?

I'm a stay at home mother and my neighbor asked if I wanted to do some data entry for her at her home office in a ';1099'; type of situation. I have NO idea what this means besides it being a tax form for a contractor/subcontractor. Do I have to legally have a business or any type of licenses in order to do this? I want to make sure that everything is done legally. In order to accept this position what do I need to know about the legal ramifications? What about when I file for taxes? -thanx