I've used this tool many times and a great tool indeed!
From The Authors:
All About Picking Colors
Digital color can be represented in a number of ways. The most common ways to represent color on the web are via a 6-digit HEX number, RGBA, and HSL (Support for HSL was added in CSS3).
Hex is a 6-digit, 24 bit, hexidecimal number that represents Red, Green, and Blue. An example of a Hex color representation is #123456, 12 is Red, 34 is Green, and 56 is Blue. There are 16 million possible colors.
RGBA is similar to Hex in that it has 24 bits for RGB color, bit there is an additional 8 bit value for transparency.
HSL stands for Hue, Saturation, and Lightness. The values are based on a position from the center of a color wheel. The value for Hue is from 0 to 360, representing the degrees on a color wheel. Saturation is the distance from the center of the color wheel. The L stands for Lightness, which represents the preceived liminance of the color.