Each label has their own definition and policies for "unsolicited" material. "Unsolicited" material means either:
1. materials the record label hasn't invited you to send, or 2. materials submitted by representatives the label hasn't had business associations with. The purpose of a label's policy of not accepting unsolicited material is to protect the label and its artists from potential copyright infringement lawsuits, and to prevent aspiring artists from submitting material they haven't properly registered with the US Copyright Office (or properly licensed, if the songs were written by someone other than the artist). Most top management companies, artists, agencies, producers, publishers, TV and film producers, TV networks, and some entertainment attorneys have this policy as well.
How to take your material from "unsolicited" to "solicited" depends on the label. With some labels, getting to know someone at the label and asking their permission to send your music is enough to be considered "solicited" and get it past the wastebasket. If you get the OK to submit your material, you may be asked to write a "code word" on the outside of the envelope. If you're asked to do this, do it! It usually sets your package apart from the rest of the slush pile when the assistant sorts the mail.
Other labels only accept material from certain managers, entertainment attorneys, or agents they know, and everything else is considered "unsolicited". So, if there's such a thing as a "foolproof" way of getting your music onto the desk of someone who will listen, it's to hire a well-known entertainment attorney or manager who has clients on that label's roster and have him or her solicit your demo. (Since it's the attorney or manager's reputation on the line, they want clients who have the best shot at success, so it's not an easy process to hire one. Be patient and listen to feedback with an open mind. They know what their contacts are looking for.)
Some important tips on submitting demos:
1. If you're a songwriter, ALWAYS properly register the songs on your demo with the US copyright office before sending out your demo. It protects you and shows the label they're dealing with a professional. (Even if they pretend not to care, they really do.) If you're an artist who's performing songs written by a friend or acquaintance, be sure they've properly registered the copyrights with the US Copyright Office--not just mailed themselves a copy. The last thing you and the label want is for your potential hit to be caught up in a copyright dispute and thus be unusable.
2. Do your research and make sure the label you're sending the package to actually handles your type of music. Mass-mailing unsolicited demos to every label in a directory is a waste of time and postage, because most of them will get tossed unheard. (We're not trying to be negative here, and yes, it sucks. But let's say you had a company who was looking for the next big thing in livingroom electronics. Would you want someone to send you piles and piles of manual coffee grinders? They have to narrow it down.)
3. Address the demo package to a particular person, not just to the label.
4. If the label doesn't accept unsolicited material, don't send them any. Get "solicited" first.
5. Never try to get your material "solicited" until the demo and other elements are actually ready to mail out. When you get a "yes" you should be able to just write the cover letter, print out a mailing label, and get the package out for the next mail pick-up.