Often in administration, people make reference to a magic number known as load average but it's not always clear what this number actually means. Most of the time its simply an indicator of whether or not the server is under duress. This number doesn't have a whole lot of detail embodied in it but it's intended to be a one-glance check on server health.
Calculation of Load Average
The load average is an exponentially damped/weighted moving average that is similar to a running n² average. This number is calculated in accordance with the jiffies the kernel is tracking rather than the clock ticks. Every time slice (which can but shouldn't be tweaked in the kernel) the system load average is updated. This rolling average allows us to keep a minimal amount of information on hand and still have an average since boot.
The load that gets placed into this average algorithm is simply a count of the number of processes in the run queue at that instant. Thus, since processes who are waiting on I/O (those in the D state) need to periodically check in or wait to be woken up by the kernel; these processes can contribute to the count of processes in the run queue. Since these processes aren't taking CPU time but are taking space in the run queue they can increase the apparent load on the server (thus bringing in the I/O wait of the system into the load average) without raising the CPU usage time.
The load average doesn't tell you a whole lot of information but coupled with information from iostat or your CPU usage you can quickly use it to guage whether your server is falling down under it's load. Since it reports the number of processes in the run queue it is safe to assume a reaonably efficient use of hardware would dictate you want N + 1 (N being the number of cores in the system) as your load average.