A makefile is a macro for installing Drupal. It contains a list of files that can be fetched using the power of drush, the command line tool for administering Drupal.
Using this generator you can specify different Drupal core distributions, modules, themes, and external libraries like jQuery or WYSIWYG editors.
The end result is a small text file containing the DNA for a specific Drupal setup — YOUR perfect setup!
Drush and Drush Make turn your makefile into a Drupal installation. Then you can get building!