Bitrate is a measure of data throughput in a given amount of time. Simply put, it's the number of bits that are processed every second. For example, the audio data in an MP3 file which has been encoded with a constant bitrate (CBR) of 128kbps will be processed at 128,000 bits every second. For audio that has been encoded at a variable bitrate (VBR), the displayed value is an average.
As a general rule, the higher the bitrate used, the better the sound will be when playing back a lossy audio format. To put digital audio compression into perspective when we talk about bitrates, a standard audio CD which contains uncompressed audio data has a bitrate of 1,411 Kbps -- this is far higher than the best bitrate for MP3s (320 kbps).