HDD Ready is a term used by the community, its nothing else than the game in a folder with all loose files. The name comes from the past when there was released a pack called "hdd ready pack for og xbox" to download.
Then you have the other terms:
Redump: a full raw copy of the dvd disc, the xbox will not play it in this state, it needs to be at least converted to xiso. This file is the start point to create a good rip. Stay away from pre ripped packs like the hdd ready pack.
Xiso: This is a redump with the video partition removed so its playable. Xiso also keeps the original dvd structure intact for the best compatibility. These xiso files are created with repackinator
extracted-Xiso: These are also xiso files but they are build using another process. Where the xiso build by repackinator keeps the original structure, with this kind of xiso the dvd structure is deleted. Because of this the compatibility is a little bit less for some games but has most of the time smaller files than xiso by repackinator. A tool to buid these is extract-xiso
CCI: These are Compressed Cerbios Images. They are just compressed Xiso build by repackinator. Here the original structure is also intact. With some games there is a penalty in loading times.
HDD ready: These are like said before loose files in folders, these games are patched by dvd2xbox to be able to play. There are lots of games that are not running as hdd ready.
You can find the cerbios compatibility lists here