It's the region that your final HSC subject mark lies in (that is, the average of both aligned internal and external marks).
For two unit courses, there are 6 bands.
Band 6: 90+
Band 5: 80-89
Band 4: 70-79
etc
For extension courses, there are four "E" bands. I don't know the mark range for these - someone help? =P
I don't really know why bands exist. Some can say "Yeah I got a Band 5". But what purpose does that have? 81 is a lot different to 89.