The returned values are the reflected light intensities for each of the three LED colors (red/green/blue).
The scale is actually 0-1023. Basically, this is the raw value returned by a 10-bit analog to digital converter in the color sensor (2 ^ 10 = 1024).
The LEDs themselves may not put out enough light that you could ever reach the maximum value, so you will have to calibrate the sensor accordingly. For example, your calibration could consist of holding the sensor close to a white sheet of paper and finding the maximum value for each color, then use those maximum values to normalize the actual sensor values to a scale of 0 to 100%.