Ugly, almost pretty or pretty permalinks?

Until yesterday I hardly knew what a permalink exactly is, i. e. the permanent URL to your individual weblog posts. Today I even know that there are ugly, almost pretty and pretty permalinks. Not kidding!
Ugly permalinks look like the ones on my blog, signifying nothing: http://example.com/?p=N
The pretty ones look much nicer http://example.com/yyyy/mm/dd/post-name/ because they include the date and post-name. So of course, I want to have the pretty ones, but have not figured out yet how to get them. I have been told to click on “options” and then to find the sub-category “permalink”. But there is no sub-category “permalink” on my blog. Then I have been told that this sub-category might be hidden. So I guess, I will have to go on searching. In case, I should not find it, I can still contact my friends from the CIA. Although, … if I could get the guys of Navy CIS to help me, I would not mind either …