What do the bars mean?
For current versions:
The blue bars represent RSSI or "received signal strength indication." You want this bar to be as high as possible. For more information about RSSI, check out the Wikipedia article!

The green bars represents signal noise. The lower these bars are and the farther they are from the top of the associated blue bars, the better. For more information about noise, check out Wikipedia article!

Once you read these two articles I hope you understand why I can only show bars and nothing more specific.


For versions 0.5 and below
That's a good question that I unfortunately do not have a straight answer to.

What you are asking is the fundamental problem with obtaining information from closed source frameworks. While I can programatically get the information, there is little or no description of what it does and thus no solid explanation as to what these numbers represent precisely.

To my knowledge the bars appear to represent the link (green) and communications quality (blue) as stated in the app. :)
You can think of the link (the signal/source) quality as a persons voice. If it is soft (weak wireless card), the widget will show a low green bar and if it is loud (powerful wireless card), it would show a high green bar.
You can think of the communications strength as to how easy it is to understand what the person is saying. If they are far away, but are yelling or are directing their voice with their hands (using a directional wireless antenna) and you can hear them, then the blue bar would be high. On the contrary, if they were yelling, but in a crowd where everyone else is yelling (static/ambient wireless traffic) then you would not understand them and the?blue bar would be low.

Hopefully sometime I'll be able to get in contact with a nice (anonymous or not) Broadcom or Apple employee and find out exactly what these values represent as well the range of said values.

I have OS X 10.4 and this widget no longer works for me. Do you have the old version?
Sure do! You want version 0.5 which is on the downloads page right under the current version.