it measures whether a team is playing to expectations (based on runs scored and allowed) and is a better predictor of future results than straight wins and losses.
a team that is underperforming expectations (winning routs, losing 1-run games) is a good bet to suddenly surge in the standings. this happened last year with the yankees. conversely a team that is overperforming expectation is a good bet to come back to earth. in 2005 two good examples of this were the orioles and nationals.
obviously it doesn't always work out (last year the diamondbacks barely had the best record in the NL with a losing X W-L) but it's predictive more often than not. although at this early stage in the season it's not that helpful because of every stat nerd's best friend, small sample size.

