The peaks and valleys of this graph represent the amount of exposure in tones from darkest (far left) to brightest (far right). It's the edges you should worry about: If any of the graph spills over the left edge, you lose detail in deep shadows and usually get a dose of noise. Spill over on the right edge, and you wind up with blown-out highlights, such as a blank sky. If the graph spills over on the left, increase exposure; if it spills over on the right, decrease exposure. Sometimes you won't be able to get both sides contained simultaneously. Landscape shooters may opt to let the shadows fall off rather than get blown-out highlights, but there are exceptions such as backlit landscapes.
(From 5 Nature Shooting Skills April 2009 issue)_