A music bed is the background music that supplies the soundtrack for a demo reel. While some consider the music bed an optional artistic flourish, many employers will actively request a "demo with music bed" or "demo without music bed." It is wise to follow instructions.
If the demo reel contains audio work already, such as a demo cd or voiceover demo, an instrumental track is usually the best choice, so the lyrics will not interfere with the content. For a video-based reel such as a director's reel or a cinemarographer's reel, lyrical music can be used.