Assuming that you're referring to the values returned in the
KeywordEstimate object:
http://code.google.com/apis/adwords/docs/developer/KeywordEstimate.html
These values are only relevant for text ads shown in the Search
Network. If you bid the value listed in lowerCpc, then, on average, if
the given keyword triggers your ad, it will appear in position
lowerAvgPosition. If you bid upperCpc, your ad will appear on average
at position upperAvgPosition.
To throw out some random numbers for the purpose of illustration, the
results might indicate that bidding $0.25USD for a keyword will result
in ads that display fourth from the top, and that bidding $0.50USD for
a keyword will result in ads that appear at the very top of the list.
The numbers are all estimates, and I don't know the answer to how
accurate they are in any statistically significant way.
Cheers,
-Jeff Posnick, AdWords API Team