Well the short answer is that they indicate what kind of plastic material that item is made from. There are seven different kinds, and although all can be recycled, some can be recycled more easily than others. They also get recycled into different new products based on the type of plastic. Here is the list:
PETE (Polyethylene terephthalate) is used in the production of soft drink, bottles and peanut butter jars. It can be recycled into fiberfill for sleeping bags, carpet fibers, rope, and pillows.
HDPE (High density polyethylene) is found in milk jugs, butter tubs, detergent bottles, and motor oil bottles. HDPE can be recycled into flower pots, trash cans, traffic barrier cones, and detergent bottles.
PVC (Polyvinyl chloride) is used in shampoo bottles, cooking oil bottles, and fast food service items.PVC can be recycled into drainage and irrigation pipes.
LDPE (Low density polyethylene) is found in grocery bags, bread bags, shrink wrap, margarine tub tops. LDPE can be recycled into new grocery bags.
PP (Polypropylene) is used in most yogurt containers, straws, pancake syrup bottles, and bottle caps. It can be recycled into plastic lumber, car battery cases, manhole steps.
PS (Polystyrene) is found in disposable hot cups, packaging materials (peanuts), and meat trays. PS can be recycled into plastic lumber, cassette tape boxes, flower pots, however it is important to note that many places will not accept it as recyclable. UCSD does accept it.
This typle is called other, and it is usually a mixture of various plastics, like squeeze ketchup bottles, and microwaveable dishes. It is usually not recycled because it is a mixture of different types of plastics, but UCSD will accept it.