Spatial reference ID refers to the spatial reference system being employed -- this is important when going from a a geographic view of the world to a projected view of the world, ie, what you see when you look at a 2 dimensional paper map.
Spatial reference systems contain a couple of elements.
Firstly, the geoid, is a model of the shape of the earth -- the earth is not a sphere (sh, don't tell Google), it is in fact an oblate spheroid. The geoid shape used for GPS is known as WGS84, which is a model that works faily well globally. National mapping agencies use other geoids, that might be a better fit to local geographies.
Secondly, the projection type. This is essentially the mathematical model used to go from a 3D to a 2D representation of the world. Types include Mercator, Transverse Mercator, (both cylindical), Azimuthal, Conic, etc. All of these have trade-offs between accurately measuring distance, area or direction -- you can't preserve all three.
So, essentially when you declare a SRID in Postgis you are saying use this geoid and this projection model. Under the hood, Postgis uses a library called Proj.4, and based on the SRID information, it can convert from one coordinate system to another.
So, for example, to convert from lat/lon, which is know as 4326 in SRID terms to 900913, which is spherical Mercator, as used by Google/Bing maps, and other web mapping frameworks, you could run something like:
select st_astext(st_transform(st_setsrid(st_makepoint(-.5,52),4326),900913));