Does it mean that I'm blocking reading any input from the Server/Client for this socket for 2000 millisecond and after this time the socket is ready to read data?
No, it means that if no data arrives within 2000ms a SocketTimeoutException
will be thrown.
What does it mean timeout expire?
It means the 2000ms (in your case) elapses without any data arriving.
What is the option which must be enabled prior to blocking operation?
There isn't one that 'must be' enabled. If you mean 'may be enabled', this is one of them.
Infinite Timeout menas that the socket does't read anymore?
What a strange suggestion. It means that if no data ever arrives you will block in the read forever.