I think it's how much of the internet population has visited your site.... (correct me if i'm wrong anybody)
"Reach measures the number of users. Reach is typically expressed as the percentage of all Internet users who visit a given site. So, for example, if a site like yahoo.com has a reach of 28%, this means that if you took random samples of one million Internet users, you would on average find that 280,000 of them visit yahoo.com. Alexa expresses reach as number of users per million. Alexa's one-week and three-month average reach are measures of daily reach, averaged over the specified time period. The reach rank is a ranking of all sites based solely on their reach. The three-month changes are determined by comparing a site's current reach and reach rank with its values from three month ago." that is right off alexa.com http://www.alexa.com/site/help/traffic_learn_more as for about how many visitors it takes to get .001.... my site www.hollywoodheadache.com is averaging 500 uniques a day and our reach for this week is .00085 however i think that this varies alot for different niche sites, getting different users and different traffic.