The numbers often quoted is the diff gear ratio (see point 2 above). For example a 3.45:1 ratio will allow the wheels to turn once for each 3.45 turns of the driveshaft which is also the engine speed if your gearbox is in a 1:1 ratio gear (which is 3rd gear in your 4-speed auto or 4th gear in most 5 speed manuals).
As mentioned above you can find out your diff ration by having a crawl underneath - it will be stamped onto a small tag attached to the diff. Depending on what car you have it will probably be around 3:1, say 3.08 or 3.23 for a Falcon.
A shorter diff ratio (larger number, eg 3.45) will allow you car to accelerate faster but will run out of breath quicker and will cruise at higher revs for a given speed.
A taller diff ratio (smaller number, eg. 2.72) will allow for lower revs at a given speed, potentially a higher top speed and better economy. Though there are plenty of other factors at work also.
Diff ratios may need changing if your engine is modified to change the power/torque delivery characteristics, you have substantially different tyre diameters fitted or you are not happy with the factory selected compromise between acceleration/economy/cruising revs.
vbman187, do a search for 'diffs' and you will find at least 30 threads which are about diffs, it is one of the most common topics on this board.
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