The earth is said to be in a state of "dynamic equilibrium." Explain?

There are 2 basic processes: tectonics which builds the earth and surface processes which tear it back down again. Tectonics include volcanoes and earthquakes, and tectonic processes are responsible for plate motions, mountains and so forth. Surface processes include weathering, erosion, and the transportation of sediments, and are responsible for rounded hills, valleys, and places like Kansas. A good local example in your area (Arizona) would be the Grand Canyon. Tectonic forces are causing the uplift …

…balance. Sure, in any given place either tectonics or erosion might be winning, but on a global scale (as well as a geologic time scale) they are in balance, and will continue to be until one of two things happen: either the hydrosphere will go away and we'll have no water to perform the magic of erosion, or the earth's internal heat will die, effectively ending the earth's ability to uplift mountains above sea level.