Note the decimal number counting up in the box to the right of the lights and notice how it corresponds with the sequence of lights. Now that we have eight lights, we can represent any number between 0 and 255.
Press the 'Stop..' button when you're bored with watching the lights and try typing a number into the box yourself - then pressing 'My number'. Note how the decimal numbers below those lights which are lit add up to the number you type in the box.
The patterns of lights represent binary numbers - so-called because each digit can only be one of two possible states: 1 or 0. In computer terms, each digit is called a Bit (a contraction of Binary Digit) and a sequence of eight Bits, when grouped together like this, is called a Byte. (Incidentally, to continue the play on words, a group of four Bits is called a nibble.)