What does "refactor code" mean?
It's fancy-talk for "clean up the illegible mess you made writing the first version".
It is true that is is fancy-talk for "clean up the illegible mess you made writing the current
More importantly is that a good IDE provides support for doing refactoring (like eclipse and visual studio do) .
For instance you can go to a function/variable/class and refactor->rename which renames the function/variable/class everywhere it has been used. And it does this taking into account the namespace. A standard find and replace does not do so.
This is a great feature when you have a serious amount of code.