Each retail game (non XBLA) has up to 1000 points in achievements they can award the player as they progress through the game. For instance, finishing a level could be an achievement, or finding a secret path, or object. This also includes online based goals, such as 100 deathmatch kills, or games. Basically it's just a bunch of goals set by the developer to encourage the gamer to play the game thoroughly and, some times, in different ways. If you check the gamercards, you'll notice a gamerscore. These achievement points are added to this gamerscore. For instance, you can look at my gamercard here:
http://live.xbox.com/member/IJoel .
Oh, and Xbox Live Arcade games have up to 200 points to distribute in achievements.