Here's a good link for info on different measures of CFM http://www.fluidenergy.com/market/closer_look_air.htm
In this case it means your compressor will run most air tools, but a grinder or sander will only run for about a minute at a time.
btw, that's the number (SCFM) you're interested in when looking at compressors, NOT the "horsepower" rating of the motor. They've started using some really freakishly-optimistic calculations on electric motors lately - what used to be a 1-hp motor is not passing for 3 or 5 - a TRUE 5hp electric motor will weigh about 150-300 lbs!!! Not that I think they're LYING or anything... :spank: :rant:
One thing to keep in mind with air compressors as well. The higher you are in altitude, the more compressor you need. The thinner air at higher altitudes is harder to get any volume out of. After all, an air compressor is just that, an air compressor, just like and engine. Jim Burek