Gruber broke this concept down in a November '05 post titled Full Metal Jacket (under the Display heading), but to summarize: most of the dimensions of elements in Mac OS X (and other OSes to my knowledge) are defined in pixels - the menu bar is 22 px high, for example. This explains why things 'seem to look a little smaller' when you move from the 1024 x 768 dimensions of a 12" display to the 1440 x 900 resolution of the latest 15" PowerBook G4 or MacBook Pro displays. Conversely, if you decrease the resolution on the machine you're working on now, things will look a bit bigger; you have smaller resolution and fewer ppi (or dpi) on screen, so some elements change size. This can become a problem in the context of notebook displays and their resolutions - if you take the 15" MacBook Pro's resolution higher than 1440 x 900, things could become smaller than what many might consider usable (these same rules apply to Windows and I believe Linux as well). Further, you can't just keep increasing notebook display sizes like you can with desktop displays; I've heard of the 19" notebooks Engadget has come across, and I personally don't consider a 16 lb computer worthy of the 'portable' adjective.
This idea of resolution independence, as you might glean from the name, is a new concept (as far as I know) that restructures how element sizes are defined in Mac OS X, ideally making it possible for higher resolutions without forcing users to squint at everything they do on-screen. This also could usher in much higher ppi resolutions which could bring computer displays that much closer to properly displaying high-detail objects.
The reason I'm mentioning all this is that Dustin MacDonald, the aforementioned developer, has echoed Gruber's sentiment that evidence of Apple's move to resolution independence is already present in 10.4, and he goes a little further to explain some of these elements for those who really wanna get their nerd on.
Bottom line: it sounds like developers are getting excited about some of the potential fundamental changes that the upcoming 10.5 update could usher in for the Mac OS X experience. This most likely will have a significant impact on Mac OS X's ability to display complex things like anti-aliased objects and serif fonts with a richness and accuracy that could finally match the real world. I agree with Dustin: WWDC can't come soon enough.