The fretboard is carved out in between the frets in order to reduce friction between the pads of the guitarist's fingers and the fretboard. With a scalloped fretboard guitar, the pads of the guitarist's fingers touch only the strings, and not the fretboard.
@SupaCat: A guitar should always be good looking.
Edit: @Fiberfar: A picture truly is worth a 1,000 words (well in this case about 43
). LOL