The first posts has #0, the first reply has #1 and so on.
Many forums have a "quote" function, where the actual text you want to quote on is shown.
If this is not the case, #number is used to refer to a specific post.
In some rare cases, when a posts is deleted, the numbering will automatically try to fix the order, which can be messy if a user has made a reference to a post that is deleted, and thus refering to something that doesn't make any sense.
- I agree on what #3 said, but #8 is all wrong.