Palm Muting is a great skill that I don’t think is used all that often. I use it a lot since I enjoy playing acoustic songs that use the guitar as a rhythm instrument as well (think tunes a la Jack Johnson).
To use palm muting what you want to do is use the fleshy part of your palm below where you thumb joins your hand and place that over the strings just above the bridge. When you do this you reduce the amount of noise that comes from the strings since they are not allowed to shake as much as when there is no hand pressed against them.
By varying the pressure and location of your palm you can get some really cool tunes out of your acoustic or electric.
This technique takes sometime to master and you need to play with it but it can allow you to create some great rhythm parts or mix up a cover tune you might already know and love to make it your own.
Other Posts:
http://www.pianoplayingtips.info/beginner-guitar-lesson-on-learning-the-notes-on-each-guitar-string
http://www.guitarlessonscritic.com/blog/learning-guitar-string-notes-first-step-to-a-solid-beginner-foundation/