The len function does measure length. In this case it is measuring the length of an list (or often called an array).
The sys.argv represents a list of strings passed in via command line arguments. Here is some documentation on it http://docs.python.org/2/library/sys.html
An example from the command line:
python learning.py one two
This will have a total of three arguments passed into sys.argv. The arguments are learning.py, one and two as strings
The code,
sys.argv[1]
is retrieving whatever is stored at index one for the sys.argv list. For the example above, this would return the string 'one'. It is important to remember that python lists are zero indexed. The first element of a non empty list will always be index 0.