Ok, I'll "disect" it like this:
multi = this is used with normal IDE hard drives so the computer can wich adapter to look at.
disk = The disk on the controller. If multi(0) is used used,like in your case, this value will always be 0.
This is where we get into the "good stuff" that you can edit to boot another operating sytem or whatever if need be:
rdisk = this specifies wich disk on that controler. In this case, 0 would be the first hard drive, and rdisk would mean it's looking on the second hard drive if theres one in the computer.
partition = Which partition the operating system is on. In your case, because the number is 1, the first partion.
\Windows = Finally, the last portion of this line defines the directory (folder) of where windows is located.
So your boot.ini you show above is telling the computer that windows is located on the first partion of the first hard drive, in a folder named Windows.
EDIT: looks like we both posted at the same time