Choosing the right permalink structure in WordPress is important in terms of SEO and performance. WordPress provides plenty of options to choose custom permalinks. WordPress permalink structure has to be chosen carefully because it has direct impact on SEO and performance.
A “permalink” a widely used term for a permanent URL link in blogosphere that that points to a specific blog entry. Usually permalink remains unchanged indefinitely unless you change the structure for some reasons.
Configuring Permalinks in WordPress is simple but you need to consider many different points before finalizing the structure. You can use man different structure tags to complete the permalink. The structure tags can be %year% , %monthnum% , %day% , %category% , %postname% etc.
The default permalink structure in WordPress is as below,

1 http://www.yourblog.com/?p=123

But the above structure is not a perfect structure in terms of SEO and is not a pretty URL.

## Verbose rewrite rules Issue Fixed in 3.3

Prior to WordPress 3.3  using a structure that starts with category or post name has created lot of issue in terms of performance. For example,

1 2 /%category%/ /%postname%/

Both the above structure forced to have to have verbose rules because you have %category%  or %postname%at the beginning of your permalink structure. This was true for any ambiguous structure(including permalinks which has %postname% or %category%). This created massive performance bottlenecks especially if your blog has hundreds of articles in it. In general having %category% at the beginning of your permalink structure created a lot more verbose rules than %postname% because of the way it is matched.
But fortunately this issue is fixed in 3.3.1. In this release the fix (changeset 18541 ) eliminates verbose rewrite rules for ambiguous rewrite structures, resulting in massive performance gains.

## SEO and WordPress Permalink Structure

The most ideal permalink structure is the one with just the post name if the post name adds SEO value to the article.

1 /%postname%/

As we all know short URLs with 3-5 words is ideal including few keywords. In this case just unique post names as part of the URL is an ideal choice in terms of SEO.
You can also opt for the permalink structure with category (%category%). If your category is short and adds SEO value, then prefixing category is a good idea.

1 /%category%/%postname%/

If you are already using a permalink structure similar to the above examples then you can reap the benefits. But if you have a different structure like “/%year%/%monthnum%/%day%/%postname%/” then you may want to change the structure. If your site has been established for a while then think twice before changing the permalink structure. Changing the permalink structure will break the inbound links handled carefully using .htaccess redirects. So if you are not sure about changing permalink structure it is always good to seek some expert advice before making any changes.