From the manual:
User Reputation in its simplest form is a ranking of your user's benefit to your forum. Its basis comes from the opinions of all of your forum users that choose take part in it.
Users gain and lose reputation based on how their posts are scored by other forum participants. Users with the ability to affect reputation, will either give or take aways points by approving or disapproving with a post's content.
i guess i will be the one that ask.. what does this mean? and why do i care?