%s and %d are standard Lua string formatting tokens.
http://pgl.yoyo.org/luai/i/string.format
http://www.wowpedia.org/API_format
%s means "convert the provided value into a string and insert it here". string.format("Hello, %s!", "world") is the same as "Hello, " .. "world" .. "!" but more localization-friendly, more flexible, and more powerful.
%d means "round the provided number into the nearest integer and insert it here".