"The principle of eternal progression cannot be precisely defined or comprehended, yet it is fundamental to the Latter-day Saint worldview. First used by Brigham Young, the term embodies many concepts taught by Joseph Smith. Although progression may take many forms, in one sense eternal progression refers to everything that people learn and experience by their choices as they progress from premortal life, to mortality, to postmortal spirit life, and to a resurrected state in the presence of God. Personal progression is possible in each of these states, but not the same kind of progression. No official Church teaching attempts to specify all the ways in which God progresses in his exalted spheres; "there is no end to [His] works, neither to [His] words" (Moses 1: 38). God's glory and power are enhanced as his children progress in glory and power (see Moses 1: 39). The concept of eternal progression is a salient feature of the gospel of Jesus Christ, readily distinguishable from traditional Christian theology. Latter-day Saints not only seek personal and righteous improvement in this world but anticipate the continuation of progression eternally." 
This definition sets some of the groundwork for what eternal progression means and its implications in Mormon theology.
- "When you climb up a ladder, you must begin at the bottom, and ascend step by step, until you arrive at the top; and so it is with the principles of the Gospel—you must begin with the first, and go on until you learn all the principles of exaltation. But it will be a great while after you have passed through the veil [died] before you will have learned them. It is not all to be comprehended in this world; it will be a great work to learn our salvation and exaltation even beyond the grave" (Joseph Smith, Teachings of the Prophet Joseph Smith, p. 348).
- "It is the first principle of the Gospel to know for a certainty the character of God. … He was once a man like us; … God himself, the Father of us all, dwelt on an earth, the same as Jesus Christ himself did" (ibid, pp. 345–46).
Eternal progression and man
The term is clear in what it means - people are eternally progressing. Thus, man is always progressing. According to Mormon theology, everyone was at first "intelligences".
- Though man's spirit is organized from a pure and fine substance which possesses certain properties of life, Joseph Smith seems to have taught that within each individual spirit there is a central primal intelligence (a central directing principle of life), and that man's central primal intelligence is a personal entity possessing some degree of life and certain rudimentary cognitive powers before the time the human spirit was organized (Hyrum L. Andrus, God, Man and the Universe, Salt Lake City: Bookcraft, 1968,p. 175)
In other words, "intelligences" is to be understood as that which is made up of a pure and fine substance - spirit - and that which is progressing. Thus, these intelligences were formed in to spiritual beings, and then attained bodies. As each person has their body, they have the potential to progress even further and become a god.
- Latter-Day Saints are taught that only those who are married for eternity can become as God. Only a god can have spirit children of their own. Thus, the cycle continues, as does our relationship with our Heavenly Father. 
Even the founder of Mormonism, Joseph Smith Jr. taught this very idea,
- And you have got to learn how to be Gods yourselves--to be kings and priests to God, the same as all Gods have done--by going from a small degree to another, from grace to grace, from exaltation to exaltation, until you are able to sit in glory as do those who sit enthroned in everlasting power. 
- "The main trait that separates the exalted from the non-exalted is the ability to have sex and procreate in heaven. It is to remain married and procreate after the resurrection. It is to create universes in which your children will live. It is to be a God. For a Goddess, it means she will spend all eternity pregnant and bearing children. For some women, this sounds like a great and glorious blessing and they get so happy they break down in tears when they think about it. My wife is like that. They love babies. They love being pregnant." -John Walsh, LDS Philosophy List (1 Jan 2005)
Eternal progression and God
The implications of eternal progression clearly imply that God has not always been God. Following the laws of eternal progression, God was once a man. In a famous couplet coined by Lorenzo Snow, it has historically been taught that,
- As man is, God once was. As God is, man may become
This doctrine was also taught by Mormonism's founder, Joseph Smith Jr. who said,
- [F]or I am going to tell you how God came to be God. We have imagined that God was God from all eternity. [That he was not is an idea] incomprehensible to some. But it is the simple and first principle of the gospel-to know for a certainty the character of God, that we may converse with him as one man with another. God himself, the Father of us all, dwelt on an earth the same as Jesus Christ himself did," 
Eternal progression effects everything in Mormon theology, from who God is, how he got there, and how he passes these opportunities on to his spirit children.
- "The Book of Moses informs us that the great work of the Father is in creating worlds and peopling them, and "there is no end to my works, neither to my words," he says, "For behold, this is my work and my glory—to bring to pass the immortality and eternal life of man," and in this is his progression.
- "Commenting on this the Prophet Joseph Smith has said: 'What did Jesus do? Why; I do the things I saw my Father do when worlds come rolling into existence. My Father worked out his kingdom with fear and trembling, and I must do the same [that is Christ must do the same]; and when I get my kingdom. I shall present it to my Father, so that he may obtain kingdom upon kingdom, and it will exalt him in glory. He will then take a higher exaltation, and I [Christ] will take his place, and thereby become exalted myself. So that Jesus treads in the tracks of his Father, and inherits what God did before; and God is thus glorified and exalted in the salvation and exaltation of all his children.'
- "Do you not see that it is in this manner that our Eternal Father is progressing? Not by seeking knowledge which he does not have, for such a thought cannot be maintained in the light of scripture. It is not through ignorance and learning hidden truth that he progresses, for if there are truths which he does not know, then these things are greater than he, and this cannot be. Why can't we learn wisdom and believe what the Lord has revealed? (Doctrines of Salvation, Vol.1, p.7)
- What do we mean by endless or eternal increase? We mean that through the righteousness and faithfulness of men and women who keep the commandments of God they will come forth with celestial bodies, fitted and prepared to enter into their great, high and eternal glory in the celestial kingdom of God; and unto them, through their preparation, there will come children, who will be spirit children. I don't think that is very difficult to comprehend and understand. The nature of the offspring is determined by the nature of the substance that flows in the veins of the being. When blood flows in the veins of the being, the offspring will be what blood produces, which is tangible flesh and bone, but when that which flows in the veins is spirit matter, a substance which is more refined and pure and glorious than blood, the offspring of such beings will be spirit children. By that I mean they will be in the image of the parents. They will have a spirit body and have a spark of the eternal or divine that always did exist in them. - Melvin J. Ballard, Teachings of the Latter-day Prophets, SLC: The Church of Jesus Christ of Latter-day Saints 1986, pg. 386.
- Becoming like God: An Evangelical Doctrine of Theosis (PDF), by Robert Rakestraw (JETS)
- The Mormon Plan of Eternal Progression (carm.org)
- What is eternal progression?
- Our Hero Discovers His Pelagian Taint, by Adam Greenwood
- How can God be all-knowing and still progress eternally?
- "Eternal Progression and the Foreknowledge of God," BYU Studies 8, no. 1 (1967): 37–46.