Your team's velocity is the amount of work the team has shown it can complete in a sprint. You can use this information to help estimate how much work can be completed in future sprints.
You can see your team's current average velocity by clicking the burndown chart to expand it in its own window.
Velocity only makes sense as a relative measure. There is no specific velocity that is good or bad or standard, because no two teams take on work of exactly the same scale or complexity. However, if your team's velocity is increasing from sprint to sprint, you can surmise that you are on the right track.
Velocity is calculated by dividing the amount of work time contained in the sprint by the effort completed. Effort is often measured in "story points."
For example, say your team used Sprint 2 to complete the tail assembly, which had been estimated at 13 story points, and the communication system, which was worth 8 story points. In total, 21 story points were completed during that sprint. If each team member put in 8 hours a day, and you are working ten-day sprints, it took 560 person-hours to complete the work. When you divide the hours in the sprint by the story points completed in the sprint, you find that your team is able to complete a story point in just under 27 hours.
Now that you know your team's velocity and the number of story points at stake, you are in a position to guess at how much work your team can complete in the next sprint. As each successive sprint exposes more information about your team's strengths and weak points, your estimates can become increasingly reliable.