Scale length is the distance between the nut and the twelfth fret, doubled. On a steel strung acoustic you can't measure from nut to saddle because of the slant for intonation compensation. A longer scale length requires a greater tension on the string for the same note at the same pitch in relation to that note on a shorter scale length.
Typical scale lengths are 24.9" (such as Gibson electrics and Martin's 000-42 and 000-28) , 25.4" (most Martins) and 25.5" (Fender Stratocasters and Telecasters). In principle, though, there are no particular rules for scale lengths. PRS released a 25.0" guitar as a middle ground between Fender and Gibson, for instance.
Some consequences of scale length:
1. The lower you want to tune an instrument, the longer the scale length must be to avoid strings slacking, introducing fret buzz or flopping about.
2. A longer scale in standard tuning is generally harder to play than a shorter scale.
3. A longer scale will have more sustain in the notes due to the higher tension. It will also tend to sound a bit brighter.
4. A shorter scale's slacker tension allows guitarists to upgrade their string thickness for a fatter sound.
Also, it easier to bend strings on a short scale relative to a long scale with the same gauge strings. So the blues players tend to like them.
This all goes a long way to explaining the difference between a 000-42 and an OM-42 (that's the problem with looking at Martin's product list; they have something like 100 different models, and it's so difficult sometimes to figure out what the differences are between each.
So after reading this, I'm thinking maybe I should get a a short scale guitar. I'm always looking for a good excuse to buy another one! Even a port excuse is better than no excuse at all.
Then I realized....I already have one! D'oh!!