The internal scripting exploit is an exploit within VVVVVV's scripting engine that allows for internal scripting commands to be used, thus giving the user more control than with regular simplified scripting. These commands are the actual direct commands in the game engine itself, and all simplified scripts are translated to internal commands under the hood. Internal scripting is a superset of simplified scripting.
This exploit was discovered relatively early into the game's life, and the methods of doing it have evolved over time. VVVVVV: Community Edition adds the ability to use internal commands normally, thus negating a need for an exploit.