As one word, "everyday" is a adjective. It describes something you see often or commonplace. Since adjectives modify nouns, you'll usually see it in front of the noun it is describing.
I avoided my everyday route to school.
I got another everyday tie for Father's Day.
I enjoy hearing the British accent over the everyday, American accent I grew up with.
Notice in that last example that I threw in two adjectives. I'll save this for another lesson, but two or more adjectives modifying a noun have commas between them.
"Every day" on the other hand is a phrase which means "each day." "Every" is an adjective, and it modifies the word "day."
I want to hug my kids every day.
I try to whistle every day as I work to help the time go by faster.
I see that broken down car every day I drive in this neighborhood.
Jordan McCollum offered this extra bit of information from Annette Lyon:
Annette Lyon gave a great guideline for figuring out if you need "everyday" or "every day": if you can put "single" between "every" and "day," they're separate words. "It was an everyday thing." vs. "It happened every [single] day."
So to test my examples:
I want to hug my kids every single day.
I try to whistle every single day as I work to help the time go by faster.
I see that broken down car every single day I drive in this neighborhood.
Hey, it worked! I passed! *Whew*