It is the time difference (in milliseconds) from when it was scheduled to run it and when it actually ran.
alert(setTimeout(function(a) { alert(a) }, 2000));
If you clear the first alert in time, you will see the next alert is somewhere -10 to 10. If you wait a few seconds, you will see something that is around the time you waited minus 2000.
The same thing can be seen for setInterval. Run the following in Firebug:
setInterval(function(a) { alert(a); }, 2000);
Try closing the alert quick, it will be around 0 again. Leave it open - it will give you a large value.
Note This is on Firefox Mac, where keeping an alert open will halt processing of Javascript, so the timer does not execute until I close the alert. The behavior of the tests above may be different in other browsers